Why Great Engagement and Retention Can Pay Dividends for User Acquisition

This topic is taken from a conversation, The Basics of Growth-Engagement & Retention, between Andrew ChenJeff Jordan, and Sonal Chokshi on the a16z Podcast. Cheers for the valuable knowledge.

Never forget to appreciate your old clients as well. It’s 7x more expensive to get a new customer than to retain an existing one.” –Invesp

The reality: as much as paid acquisition is a saving grace for most companies, the cost of acquiring customers will inevitably become more expensive over time, regardless of your industry or business.


Because there are only so many people on Earth!

And after acquiring all of the very excited, die-hard core customers, you’ll be left to define new target segments and geographical markets who will likely require a whole new host of touch points and trust building before they ultimately make a purchase.

Enter engagement & retention, your saving grace.

Like 2 skilled hosts at a dinner party, their sole purpose is to get customer involved and staying as long as possible (i.e. reducing churn).

Because after all, you don’t want only new customers, but you want them to stay and become loyal users.

So where to start?

Going back to the dinner party analogy, new customers are new guests who deserve world-class hospitality (i.e. engagement and retention tactics).

That includes, great conversation (i.e. push messages, content marketing, using their name & location in communications), a surprise dessert at the end of the meal (translation: new features, community events, gifts), and perhaps an email the next day saying, “thanks for coming!” (i.e. feedback surveys, thank you messages).

Don’t be tempted by short term revenue and profit; rather, always think about the whole customer journey: 1st begin with a great product, then a robust engagement/retention strategy, and finally lead acquisition.


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