Customer Acquisition & Customer Retention Strategies

Customer Acquisition and Customer Retention are two essential strategies in marketing that focus on acquiring new customers and retaining existing ones. Here’s a short note on each strategy:

Customer Acquisition

Customer acquisition refers to the process of attracting and acquiring new customers for a business. It involves various marketing efforts aimed at increasing brand awareness, generating leads, and converting prospects into paying customers. Some common customer acquisition strategies include: Targeted Advertising, Social Media Marketing, Search Engine Optimization (SEO), Referral Programs.

Customer Retention

Customer retention focuses on maintaining and nurturing existing customer relationships to encourage repeat purchases, foster loyalty, and maximize customer lifetime value. It is generally more cost-effective to retain existing customers than acquiring new ones. Some common customer retention strategies include: Personalized Communication, Customer Support and Engagement, Loyalty Programs, Upselling and Cross-selling, Continuous Improvement.

A successful marketing strategy often combines both customer acquisition and customer retention efforts. While customer acquisition helps expand the customer base, customer retention ensures long-term profitability and customer loyalty. By effectively acquiring new customers and retaining existing ones, businesses can achieve sustainable growth and maintain a competitive advantage in the market.

Academic Questions on Customer Acquisition & Retention

Question: As a consultant you are required to create a Consumer Acquisition and Retention plan for Fortnocks Health Club. The plan should consider the issues stated below:

Analyse the organisation and identify the areas they may create value for customers in order to attract and retain customers to enhance customer experience.

Company Introduction and discuss that they are facing challenges. Analyse the organisation and identify the areas they may create value for customers in order to attract and retain customers to enhance customer experience.

What is Value? Value Creation activities (for the case company in view of the challenges they face and how will it help them) Focus on Value Creation activities only. (Link to Buttle or Payne’s Model where you think you can).

Discuss the importance of data management and how this can effectively underpin the success of the acquisition and retention for the organisation. Identify and recommend appropriate techniques for the organisation to capture data and understand their target market.

Discuss data/ data management, its Importance of data in CRM and why data management is important for Fortnocks (note that though they have a database, they are not using this optimally).

Customer Data Integration ( CDI). Mention data capturing, data management and customer data integration from the perspective of the touchpoints and it improves Customer engagement and Customer experience. For example, Why does the case company need to use touchpoints to collect customer data, which touch points can be used and how will it help them? (Walk-in/ Face to Face Interaction, Phone calls, email, website, flyers, events like “ Fitness fest”, WoM, E-CRM, Social CRM.) ( For example, you can talk about understanding purchase/ usage behaviour, predicting preferences, maintaining relationships to retain their customers, advantages of cloud based CRM software for easy access and smooth integration. other software and technology solutions, giving the company an opportunity to leverage their CRM data in more strategic ways to target customers).
a) Can they use Social Customer Relationship Marketing as a strategy to acquire customers’ data? If so, how can they collect this data and how will they use it to acquire and retain customers? What ethical issues do you think they have to acknowledge as they collect this data? b) How can they effectively use e-CRM to retain their customers? Is this an appropriate strategy that can be used by this organisation? – Please justify your answer.)

Analyze and identify appropriate approaches to customer acquisition and retention for Fortnocks Health Club and justify how these approaches can enhance customer experiences. Acquisition, Retention and Win-back Strategies.

Acquisition Strategies: Define Acquisition; discuss why Acquisition strategies are needed for Fortnocks (ref that they need to go from 250 members per month to 400 members per month to break even. And then suggest minimum3 Customer Acquisition strategies.

Retention Strategies. Define Retention; discuss why Retention strategies are needed for Fortnocks (ref that they are averaging at 30- 40 new members per month, but also losing about 30 members per month- high churn and low retention rate. And then suggest minimum 3 Customer Retention strategies that will help them to retain customers/ members.

Win-back Strategies. Define Win-back ; discuss why Win-back strategies are needed for Fortnocks (ref that pre covid they had 1250 customers at the peak, which they have lost to Pure Gym and Fitness first. They need to go from 250 members per month to 400 members per month to break even. And then suggest minimum 3 Win back strategies. for Win back, look at strategies of Pure gym and Fitness first (its main competitors ) are doing and suggest strategies better than them (also see links down for help for writing various startegies).

Compare and contrast various effective measuring techniques appropriate for the customer acquisition and retention strategies. Recommend and justify techniques appropriate for this plan.

Measuring Performance: Start with why is measuring performance necessary, how is it measured ( metrics), define, metrics. Then say that Fortnocks strategies will be successful if they measure these through metrics as down: Acquisition Metrics, Retention Metrics, Win-back Metrics – min 2 to 3 – you can compare and contrast within. (You need to Compare and contrast the metrics and then Recommend 3 to 4 metrics that Fortnocks should follow, justifying why. Recommend CLV, CAC/ COCA, Churn Rate, Retention rate etc.)

Metrices that can be referred to are: Member retention, Churn rate, Attendance rates, Employee satisfaction, Customer reviews

Examples of metrics: LTV, Conversion Rate, CVR, Customer Acquisition Cost/ COCA/CAC, Customer Retention Rate. Churn Rate. Existing Customer Revenue Growth Rate. Net Incremental Revenue. Repeat Purchase Ratio. Daily, Weekly, and Monthly Active Users (DAU, WAU, MAU). Customer Lifetime Value (CLV). Lifetime value ( LTV). Product Return Rate. Repeat Purchase Rate. Conversion rate. Time for Conversion. Lead Generation by Channel. Click Through rate ( CTR). Net Promoter score (NPS). Return on marketing Investment ( ROMI). Return on Investment ( ROI)