Acquisition vs Customer Retention Costs — Call Center Guys
Customer Acquisition vs Customer Retention Costs

Customer acquisition and customer retention costs are often two of the most expensive costs associated with a product or service is driven business. Understanding how these two factors play into your operations and affect costs is paramount to the success of your business.

The costs associated with acquiring new customers are easily overlooked expenses in business operations and this is only half of it. Customer acquisition is the other equally important and financially rewarding half. Increasing customer retention rates by 5% increased profits by 25-95%, a huge increase reflected in the bottom line.

Throughout this article, we'll dive into the expenses associated with poor customer relationship management. After establishing a foundation for understanding these expenses, we'll discuss how to effectively maintain and retain loyal customers.

Customers are expensive! Here is why

Customer acquisition is all the costs associated with reaching, capturing, and converting a given individual into a customer. For an e-commerce business, common costs associated with customer acquisition are marketing, discounts or incentives, and resources such as employee time.

Selling to a customer you have already acquired is 60-70% more successful relative to selling to a new customer.

Why is it important to know my customer acquisition costs?

Great question! Customer acquisition costs (CAC) are important to know for numerous reasons, some being:

  • Helps businesses understand how important a customer is to the business. You can derive from this a customer retention plan

  • Allows for ROI (return on investment) calculations

  • Important figures for your marketing team and efforts.

  • Can analyze this number and determine ways to lower it. Ignorance is not bliss in this scenario

Customer retention will save your business money

Customers, once acquired, are valuable assets to your business.

They are the one's purchasing products or services, spreading word of mouth, and interacting with your online content, you do not want to lose customers.

Similar to customer acquisition customer retention is expensive. But, this expense comes from a concept called loss of opportunity cost. The cost associated with losing value due to an erroneous decision.

U.S companies lose $136.8 billion per year due to avoidable consumer switching

Keeping customers happy with your business yields a number of positive benefits for your bottom line. Loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering.

How does my business retain our newly acquired customers?

Deliver quality customer support.

So you have acquired one of these expensive customers, now what? What you shouldn't do is treat them poorly! The average business will lose around 20% of its customers from failing to maintain their customer relationships. A disturbing fact for something that can be done so easily.

Customers value customer support. Shocking, I know. By:

  • Maintaining multiple channels of communication

  • Consistently delivering quick response times and,

  • Communicating frequently with customers,

you can ensure your business is providing exceptional customer support. Implement these practices while avoiding unnecessary strains on your company's resources by outsourcing your customer relations to Call Center Guys professional and capable call center team.

American Express found 33% of customers will consider switching companies after just one instance of poor customer service.

Stay in your customer's mind by following these 4 steps.

Once you have established this relationship with your customers and are maintaining it, it is crucial that you continue checking in with them. Make sure you stay at the forefront of their mind as their go-to product or service.

This can be achieved by:

  • Requesting reviews

  • Offering discounts

  • Checking to see how their last experience was with your business

  • Implementing a loyalty program that sends out newsletters and offerings. One that offers loyalty rewards, surprise gifts and thank you letters.


Customer acquisition and customer retention are important metrics to pay attention to as they are directly correlated with the success of your business.

Businesses need customers.

Like it or not, your business will not function without paying customers that generate revenue and word of mouth for your brand. It is best that you accept this fact and work to optimize your customer acquisition and retention efforts so that your business can thrive.

With this newfound or refreshed information in mind, be sure that your business is properly handling customers. Create automated channels of communication that frequently reach out to your customers in order for your business to stay relevant. Hire a professional customer communications inbound team that guarantees your customers are receiving the best support, and ensure your customers feel valued in the communications you have with them.

Customer RelationshipCustomer Experience

By: Jawad Yusufali