Acquisition Versus Retention – New Thoughts On An Old Argument

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While attending the Strategy And Innovation Forum in Orlando today, I had the pleasure of presenting on the topic of Social Shopping with Carrie Johnson from Forrester Research. We each did a twenty-minute presentation with about fifteen minutes of questions and answers. One individual asked our thoughts on where online merchants should best devote their time – on retention or acquisition?

It’s oldest discussion in the Marketing book – focus on keeping your existing clients thrilled or wooing a new Consumer over to your brand?

In a perfect world, it’s both and everything in between. In the real world, the general Marketing rule is that retention is lot more cost effective (re: cheaper) than acquisition.

I think the power of Search and the growth of Google changes how we define acquisition. There’s a new reality: every day thousands of potential new Customers are fingers deep in the Search Engines looking for your products and services (it could be hundreds, it could be thousands of people). If you’re working on any level of acquisition in your Marketing efforts (for shame if you’re not), and you’re not present on that first page of Search Engine results (organic, paid or both), I’d argue that you’re not really doing acquisition at all (and your Marketing is a failure).

It’s kind of ridiculous to be spending ad dollars on radio (as an example) in hopes that someone hears your spot, remembers it, and is motivated to action when another person was actually raising their hands in a Search Engine and screaming, "hey, I’m looking for you," and you are nowhere to be found.

Advertising and Marketing budgets need to be shifted (more than ever) to maximizing your Search efforts. If you’re tapped there – meaning there’s a healthy flow of mass keyword purchases that are constantly being tweaked, added too and adjusted – then mass advertising is an excellent compliment to your activities. Where do these potential Consumers – who are searching but not finding you – get lumped? It’s not retention (they never bought from you), and it’s not acquisition if you’re not in front of their faces when they are searching for you.

Missed Opportunity.

Acquisition or Retention might not be the right question anymore. We have verifiable proof that most of the companies out there are not active enough in their organic and paid Search Engine strategies. Jesse James was once asked why he robbed banks? To which, he answered: "that’s where the money is."

Have your acquisition or retention strategy discussion after you’re convinced that you’ve been in front of the people who are proactively searching you out first.


  1. That’s exactly right.
    Word of mouth was first. Passive presence when someone in your village asked, “Hey, where do I get my shoes fixed?”
    Broadcast was next. Interrupt people who probably aren’t interested in your stuff and play the numbers game, hope you stay out in front long enough.
    Search was next. When someone looks for you, they find you, and they’ve communicated their intent and interest by the virtue of searching alone.
    What’s next after search? My guess – predictive analytics. Amass a large enough database to get statistically meaningful information, cross reference it with open data sources, and then when someone seeks you out, with just one or two data points, you can make predictions about whether you can provide what they need or not, based on probability.
    “Mr. Joel, I see you’re from Montreal, a blogger and podcaster, president of a company, you have a Flickr page, and currently own a Casio EX-Z75. However, you haven’t posted a photo since September 16, 2007. Since you found our consumer electronics site by search, may we suggest the Sanyo VPC-CG65 camera, as it currently does everything your Casio does, but it’s smaller, lighter, easier to use, and based on your metadata on Flickr, you travel a lot, so you might find it more convenient to carry around.”

  2. I think it’s important to remember as well that even once somebody has sen your adwords, trawled your website, they are still likely to go back to their it online or offline.. and seek reassurance. Have you heard of…? What do you think of…? this is being seen in the blogosphere all the time and for this reason you’ve got to mobilise your most powerful sales force… your existing customers. And if they’re not happy, they ain’t going to be selling your products or services!

  3. I do have that camera… boy, The Ninja is good at this stuff 😉
    My main point is that many people love to talk the acquisition game, but if you’re not in those people’s faces when they are searching for you, are you really in acquisition mode at all?

  4. Acquisition Versus Retention – New Thoughts On An Old Argument
    Mitch Joel from Twist Image provides a new perspective on the retention/acquisition question. According to his blog posting from January, Search (or, in other words, Google) changes the definition of customer acquisition. The new way to look at it – “i…

  5. Mitch
    interesting perspective
    I don’t disagree but I think there needs to be additional clarification by keeping in mind that acquisition is to bring in a new customer who has never been to or long since been (however that’s defined) to your store
    in an interconnected society(another game changer) retention and the need to keep existing customers engaged/satisfied/valued is of paramount importance due to word of mouth.
    Its about plugging the holes in the bucket first because the mess can destroy your brand.
    your point about active or passive media depends on the message being communicated and the task at hand.
    SEM/SEO/organic/paid – applies to both acquisition and retention, its a matter of who one is targeting – a total stranger or someone you’ve done business with in the past.
    To your last point about a current customer searching but not finding you when they are looking to buy. My answer to that is SHAME. it serves you right for not creating the brand awareness or notable experience to have those customers find you organically.

  6. Mitch,
    reading over my contribution just now – it doesn’t seem to be a particularly good answer
    the point I am trying to make is that we don’t place enough emphasis on the organic part of our business.
    it seems its just easier to buy our way to a purchase rather than earn our way there
    besides with only 70 characters to play with in the ppc messaging window,
    are we deluding ourselves that the activities here are doing anything to build our brand equity?
    I fear that we are using google to turn our business into one huge used car sales lot

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