User Acquisition Vs User Retention

Posted on April 04/04/18

Should I concentrate on acquisition or retention, one of the frequent questions that you can hear when decision makers, sales and marketing team come together at one table.

So exactly what is this acquisition and retention these people are talking about? If you’re an entrepreneur or have a next big idea and want to make it big, then this article will help you to get a fair idea about what is meant by acquisition, retention and which one should I care and how much marketing dollar should I pour into retain old users and acquire new users.

User Acquisition

The primary goal of user acquisition is to gain new users. This means that the process is primarily focused on marketing, which is basically communicating with or attracting new customers through targeted messages and different mediums out there on internet.

Common components of an acquisition strategy typically include:(Build a landing page, Invest in App Store Optimization and Join communities

User Retention

User retention refers to the percentage of users that companies are able to hold on to and ensure they make repeat purchases. The concept is simple—when you attract new users and they’re satisfied with your product and/or service and your customer support, they’ll stick around and make repeat purchases. Since the market can be pretty competitive, some companies offer incentives to customers to increase their chances of retaining them, and to reward those who’ve proven their loyalty.

Common components of an retention strategy typically include:(Personalization,Push Notifications,Remarketing).

With Walinns cohorts you can measure how often users return to your app on daily basis. The cohort analysis can tell you how loyal and sticky is your app and users.

Which one should I care?

User acquisition and User retention are two metrics used mainly to determine the return on investment (ROI) for efforts to monetize users. Both are essential numbers to track since they will show shifts in the market or problems with a marketing plan. The numbers are different in a few ways.

My view on these metrics

Every business needs to balance acquisition and retention costs. The acquisition is important to draw in new consumers and expand the base. Retention is normally less costly and builds loyalty and the brand. Retention also often relies on far less price sensitivity from customers so that the long-term costs are recouped through sales. It is essential to track the ROI for both customer acquisition and customer retention. Poor ratios in either area are strong indicators that more research is necessary to see what is changing in the market or what is happening within the business.

About the Author

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Pavithra is based out in India, and she loves blogging, traveling and doing cool kinds of stuff in data understanding and visualization.