Over time, some customer attrition is inevitable. Even if you deliver a stellar customer experience at a remarkable value, sometimes people’s needs and tastes change.

With that said, accepting a high customer attrition rate makes it much harder to grow year after year and stay ahead of your competitors.

Some businesses get so focused on bringing new customers through the door – understandable, seeing as it’s key early on – they never quite get around to plugging up the holes where existing customers are slipping through the cracks.

Low retention brings with it some serious pressure. You have to work hard to constantly make up for lost ground – much less expand your customer base.

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What’s more important to you?

Attracting new leads or focusing on your existing customer base?

Both are viable tactics for helping to grow you business and both have their pros and cons. But which of them is the overall winner when it comes to turning a profit? Here’s a quick run down of the primary arguments for each.

1. Continually attracting new prospects provides more sales opportunities.
2. Focusing on increasing value and making the most out of your existing audience often brings higher conversions.

It’s basically a choice between growing a large audience with a low rate of conversion or having a smaller audience who are far more likely to convert.

Now whilst I’m a firm believer that there are no 100% guaranteed success strategies that apply to every single business, there’s a pretty clear winner with retention vs acquisition.  (more…)