Customer Acquisition Vs Retention Costs.

Did you know that it costs five times as much to attract a new customer than to keep an existing one? The first rule of any business is to retain customers and build a loyal relationship with them and thereby avoid acquisition costs.

It’s a well-established fact that 44% of companies have a greater focus on customer acquisition vs. 18% that focus on retention. Also, it’s true that only 40% of companies and 30% of agencies have an equal focus on acquisition and retention.

Check out below infographic, ‘Customer Acquisition Vs. Retention Costs – Statistics And Trends’ for more such interesting and relevant facts.

Customer Acquisition Vs.Retention Costs Statistics and Trends

Channels That Are Used The Most For Acquisition.

Channel %age
Websites 89%
E-mails 81%
Social media sites 72%
Direct mail 66%
Web banners 60%
Mobile devices 34%
Aggregator websites 32%
Price comparison websites 18%


While more than 89% of companies see customer experience as a key factor in driving customer loyalty and retention, 76% of companies see CLV as an important concept for their organization.

Only 42% of companies are able to measure Customer Lifetime Value (CLV) accurately.

The probability of selling to an existing customer is 60 – 70%, while the probability of selling to a new prospect is    5-20%.

Existing customers are 50% more likely to try new products and spend 31% more when compared to new customers.


How Marketers Are Using Online Channels For Retention Or Acquisition?

Online Marketing Channel Acquisition Retention Both Equally
Paid search 86% 2% 13%
Online display advertising 85% 4% 11%
SEO (natural search) 66% 6% 28%
Web retargeting 61% 22% 18%
Mobile web 52% 18% 30%
Mobile and web push notification 34% 39% 27%
Social media marketing 31% 28% 41%
Mobile apps 30% 44% 26%
Website 29% 16% 55%
Mobile messaging 23% 58% 19%
Email 21% 52% 27%


Most Effective Digital Marketing Tactics For Retention.

Channel %age
Email marketing 56%
Social media marketing 37%
Content marketing 32%
Referral marketing 26%
Search engine optimization 13%
Display advertising 12%
Mobile advertising 8%
Digital video advertising 7%
Affiliate marketing 6%
Paid search 4%

customer retention


Increasing customer retention rates by 5% increases profits by 25% to 95%.

More than two-thirds (70%) of respondents agreed that it’s cheaper to retain than acquire a customer.


Acquisition versus Retention Formulae (Annual).

  • CAR (Customer Attrition Rate) = ( Number of Customers that Leave Each Year ) / ( Total Number of Customers ).
  • CRR (Customer Retention Rate) = ( Total Number of Customers – Number of Customers that Leave Each Year ) / ( Total Number of Customers ).
  • Customer Lifetime Value (CLV) = (Total Profits) / ( Customer Attrition Rate ).
  • Customer Acquisition Cost (CAC) = ( Total Marketing and Sales Budget Including Salaries ) / (Number of Customers Acquired).
  • Cost of Attrition = (Customer Lifetime Value) * (Number of Annual Customers Lost).

amardeep kaushal

Blogger, Marketer & Data Analyst.

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