Customer retention and customer acquisition are two essential aspects of modern marketing. Regardless of how big your company is, or how you've built your presence, you will in some shape or form have to tackle both. Depending on where your company is, and what your ongoing business needs are, you may have to focus on one. But, it is inevitable that you will have to find ways to acquire new customers and then figure out how to keep them around. Luckily, in both instances, web stories can be of great help. But, even with them by your side, you will need to find a clever way to strike the right balance between customer retention vs. customer acquisition.
Before we can look to strike the balance between customer retention and customer acquisition, we first need to have a decent understanding of both. With that in mind, we will first outline the key aspects of customer retention, and how web stories relate to them.
Customer retention refers to the process of keeping existing customers engaged with your business, products, or services over an extended period. It's about building and maintaining long-term relationships with your customer base. The primary goal of customer retention is to increase customer loyalty, reduce churn (the rate at which customers stop doing business with you), and encourage repeat purchases. The biggest benefits of decent customer retention include:
- Higher customer lifetime value - Retained customers tend to spend more over time, leading to higher revenues.
- Lower marketing costs - It's often more cost-effective to retain existing customers than to acquire new ones.
- Easier brand advocacy - Satisfied, loyal customers are more likely to recommend your business to others.
The most common strategies for customer retention rely on the brand's ability to make the customer feel appreciated. This often includes some form of personalized communication where you tailor your marketing and customer service efforts to individual customer preferences. This also entails that you have decent customer service, where the customer can look for input and feedback.
Lastly, most brands opt for some loyalty programs to help boost retention rates. Simply rewarding customers for their continued business with discounts, exclusive offers, or other incentives can go a long way. Keep in mind that in all these aspects, web stories can have a role to play.
Customer acquisition, on the other hand, involves the activities and processes designed to attract and convert new customers to your business. It is, essentially, about expanding your customer base. The main goal of customer acquisition is to increase the number of customers buying your products or services. The benefits of doing so should be fairly obvious:
- Growth - Acquiring new customers is essential for expanding your business and increasing market share.
- Diversification - New customers may bring different demographics, needs, and preferences, providing opportunities for diversification.
- Fresh perspectives - New customers can offer valuable feedback and insights, helping you improve your products or services.
It is not uncommon for brands to become stale if they don't actively seek new customers and evolve their business model. This is why diversification and fresh perspectives are so important for company growth.
Seeing that acquiring customers is the primary goal of all new companies, there are a number of tested strategies you can rely upon. Firstly, you need to utilize advertising, content marketing, social media, and other channels to reach and attract new prospects. Doing so is essentially the first step in all marketing. Secondly, you will need to tackle lead generation. This includes generating leads through forms, subscriptions, or other means to capture potential customers' information. Lastly, if your brand sells products and/or services, you will need to work on your sales tactics. Sales teams can proactively engage with prospects, pitch your offerings, and close deals.
Balancing the two
As we hinted at before, the question of customer retention vs. customer acquisition isn't so much about choosing one and sticking with it. All companies need to balance the two based on their marketing budget and ongoing business needs. Fortunately, there are ways to determine which one should be your priority. And there are marketing methods that help boost both retention and acquisition rates.
In order to determine whether you ought to focus on acquisition or retention, you need to keep the following things in mind:
The first thing to outline should be your business goals. Namely, if you are in a highly competitive market with many similar products or services, customer retention may be crucial to keep your existing customer base loyal. On the other hand, if your business is relatively new or in a rapidly growing industry, you might need to prioritize customer acquisition to expand your customer base.
Not all customers have the same (CLV) customer lifetime value. Depending on what your brand is about and how your customers choose to do business with you, you might find that either acquisition or retention may prove more profitable. What you need to do is to calculate the lifetime value of a customer to determine how much you should invest.
Costs and resources
Once you have a good idea of the previous two, you need to compare the costs. Consider the cost of acquiring new customers compared to retaining existing ones. Customer acquisition can be expensive, so if you have limited resources, it may make more sense to focus on retention. On the other hand, if customer acquisition costs are reasonable and have a positive return on investment, it might be worth investing in attracting new customers.
Based on these three, you should be able to steer your marketing efforts more toward acquisition or retention. What is important is that you follow the feedback from your customers and see whether you need to make changes.
Using web stories for customer retention
Now, let's say that you wish to improve your retention rate, while not spending a fortune on it. Well, one of the most potent tools you can use is web stories. Seeing that we've written extensively about them before, we won't go into much debt. In a nutshell, these are short and engaging visual narratives typically in the form of images, videos, and text. When used properly they can be a creative and effective way to boost customer retention.
While they are often associated with attracting new customers or generating interest, they can also play a significant role in retaining your existing customer base. Here's how you can use web stories for customer retention.
A great way to reinvigorate the interest of your customers in your brand is to provide them with interesting information. The way to do this is to create web stories that provide useful tips, tricks, or insights related to your product or industry. Offer something that helps customers make the most of their purchases. When customers see the value in your content, they are more likely to stay engaged.
Highlight success stories
Another way to use web stories is to feature your long-time and satisfied customers. Share their experiences and how your product or service has benefited them. This not only showcases your product's value but also builds a sense of community and trust among your existing customers. Let the customers give their honest opinion and simply have faith that your brand has enough value.
New features and updates
Web stories are short, flashy, and attention-grabbing. This makes them ideal to announce and showcase new features, updates, or improvements to your products or services. This can be an effective way to keep existing customers excited about your offerings and show them that you're continually enhancing their experience.
The great thing about web stories is that they are dynamic. What this means in practice is that you can leverage data and customer insights to create personalized web stories. Tailor the content to individual preferences and purchase history, making customers feel like you understand and cater to their needs.
Incorporate gamification elements into your web stories to make customer engagement fun. Reward loyal customers with badges, points, or exclusive access to content. Celebrate customer milestones, such as the anniversary of their first purchase, in web stories. You can offer special rewards or thank-you messages to commemorate their loyalty.
Using web stories for customer acquisition
Once you understand what web stories are, you'll see that they are instrumental in customer acquisition. A well-made web story will grab the attention of potential customers and draw them to your brand. And in the modern marketing era, this is by no means easy to achieve. Now, the ways in which you can use web stories to acquire new customers are countless. The only limit is your creativity. But, nevertheless, let's outline some of the most effective ones.
One of the best ways to use web stories is for marketing storytelling. Craft a narrative in your web stories that engages the audience emotionally. A well-made story will always invoke some kind of emotion. It is this that makes them memorable and helps potential customers connect with your brand on a deeper level. You can also look to connect multiple web stories to tell a longer narrative. If a potential customer does get hooked on the initial story, you will easily convert them to a full-fledged customer during the narrative.
A common aspect that content creators forget is that web stories can be interactive. With platforms like StorifyMe, it is fairly easy to incorporate polls, quizzes, and clickable links. Doing so will encourage users to engage with the content and navigate to your website or landing pages. With this, you can look to naturally connect your online presence and easily present it to future customers.
Interactive elements should also make it easy for viewers to share your web stories on their social media accounts. User-generated sharing can extend the reach of your acquisition efforts.
Call to Action (CTA)
If you wish to acquire new customers it is important that you have CTAs down packed. Each web story should include a clear and compelling call to action. Whether it's "Learn More," "Sign Up Now," or "Shop Now," the CTA should guide users toward the desired action.
Acquiring new customers always goes hand in hand with testing. Namely, because they are new, you can never be sure of what your customers are like. Therefore, you will have to experiment with different elements within your web stories, such as visuals, headlines, and CTAs. A/B testing can help you identify what resonates best with your target audience.
Metrics and analytics
Lastly, it is important to use web stories to not only acquire new customers but also learn as much as possible about them. Doing so will not only help with customer acquisition but also with future customer retention. Use analytics tools to track user engagement with your web stories. Monitor metrics such as click-through rates, conversions, and bounce rates to refine your strategies over time. The more you learn about what your customers respond to, the easier it will be to create effective marketing content.
By now, it should be obvious that the question of customer retention vs. customer acquisition isn't a straightforward one. The two often overlap, both directly and indirectly. And the more you learn from one, the easier it will be to tackle the other. So, don't stress much if your current business needs guide you in one direction. While you may lose some new customers if you focus on customer retention (and visa-versa), the loss will only be short-term. Meanwhile, the knowledge you get from properly tackling your ongoing business needs will be invaluable. Lastly, we strongly suggest that you consider web stories as a potent marketing tool, and make the most of them.