Customer Retention vs New Customer Acquisition: How Do You Optimize Both?
Your customer only sees one brand. For them, customer attraction and retention blur together into one ongoing journey.
It’s important to keep that perspective in mind as you help customers progress through different teams—from sales to customer success and back again—and through different phases, such as onboarding, adoption, and renewal. Knowing these different stages can be powerful for monitoring, servicing, and motivating customers, but it all needs to come from a unified, consistent brand.
There’s no need to indulge a divisive customer retention vs. new customer acquisition dynamic. Instead, work to optimize both to attract valuable customers and retain their loyalty in the future.
Customer Retention vs New Customer Acquisition: The Common Goal
Sales and customer success teams share a common goal: securing customer lifetime value. The former pursues this goal by attracting customers whose needs can be met through the company’s solution. The latter pursues it by maximizing the value the customer achieves while using that solution.
The two teams work together and depend on each other for success. After all, both are ultimately assessed on the long-term value of the customers they attract and support.
The changes wrought by the digitization of business have, however, changed the way these roles are perceived. The bulk of customer value is now spread across years of renewal and upsell rather than being captured at a single sales event. As such, a customer-centric economy has emerged that prioritizes the customer experience as a means of inspiring long-term loyalty.
Customer attraction is as important as ever, but now there is a greater emphasis on staying close to the customer throughout their journey.
Optimize Customer Acquisition and Retention
Optimizing both customer acquisition and retention begins with identifying how each can aid the other.
Firstly, the sales team can give the customer success team a head start by delivering as much information as possible about the customer. By the time a customer reaches the onboarding phase, the customer success team should understand exactly what problem the customer is trying to solve and why they expressed interest in the product. You don’t want the customer to feel they have to repeat themselves at every new milestone.
That’s why you need to ensure that all customer data is being pulled into the same place and can be readily accessed by every member of the enterprise. This puts everyone on the same page so you can provide a consistent customer experience. Shared information leads to shared goals and makes it easy to align the efforts of different teams. Everyone can easily keep the customer at the front of their mind.
The customer success team can increase the likelihood of retaining a customer by delivering a customer experience that generates positive customer ambassadorship. Responding to Voice of Customer feedback, acknowledging escalations with personalized messaging and informing customers of resolution progress, and setting and celebrating customer goals establishes a positive customer relationship. Customers that experience value and feel like their opinions are heard will share this information with their peers, building a strong brand reputation that helps to attract new customers to your business.
Working Together to Convert Interest into Investment
The mutually beneficial bond between sales and customer success becomes even clearer when considering a freemium approach to new business. The freemium model often employed by software companies operates on the presumption that a free sample of the full service will convince a customer to invest.
For it to be successful, both the acquisition and retention sides of an enterprise have to operate in unison. The sales team demonstrates the promise of the product, the customer success team delivers on that promise, and the new business team returns to forge the final commitment. The sales team presents a solution, and the customer success team proactively delivers the right type of messaging based on the customer’s journey.
Automated Customer Monitoring
Collecting and monitoring customer data is the responsibility of every member of an enterprise. A comprehensive record of each step a customer takes, from the sales event through renewal, helps you better meet their evolving needs. Surrounding the customer with informed team members all drawing from the same repository of data demonstrates your commitment to their success.
Rather than attempting to do all this manually, it’s far more efficient to use customer success software. With such software, you can set up a series of customized alerts that automatically inform your team of key customer milestones or events and provides effective strategies for interacting with customers. As such, customer data becomes a proactive guide to engagement, ensuring you take action when needed.
Beginning with initial sales information, you can build a living, results-oriented, goal-driven hub of customer data that keeps everyone informed of the customer experience as it occurs. You would know, for example, when a customer reduces their product access or hits the threshold of a business-related metric. And you would know in time for the right team to make an impactful intervention.
By collecting customer data at every interaction, monitoring it with comprehensive customer success software, and tying engagements to timely automated alerts, you can maximize the combined efforts of both the sales team and the customer success team.
Customer Retention vs. New Customer Acquisition: Making the Most of Both
The digitization of business has empowered customers to spread the cost of their investment out over time. That has increased the importance of fostering customer loyalty and nurturing customer growth, but it doesn’t dismiss the importance of attracting new business.
Through the efficient use of customer data and the close monitoring of the customer experience, you can make your customer success engagements more impactful. The result is an opportunity to optimize both the attraction and retention of customers by presenting them with a unified, personalized brand experience.