Growing a product that doesn’t suck.

3 min readOct 11, 2018

One of the bigger returning debates in product development is whether to focus on customer acquisition (obtaining new customers) or retention (retaining and growing current customers)

Most CEOs would quickly answer; “both, of course.” But it’s not as simple as that. Let’s capture the importance and differences in successful acquisition and retention.

Every product needs users.

Obviously, growing your customer base is the fastest route to growing your business and reaching short-term revenue goals. And off-course you need a substantial user-base to give you the right insights in your products performance.

However, don’t assume acquiring new users the only way, as up-selling an existing client can sometimes be even more lucrative, and that’s before we get to “lifetime value.”

Give the people what they want.

Customer retention is probably the best metric to inform you how well you are doing at offering your services. Products with the highest retention rates are those adding maximum value to their customers.

Without a proper retention strategy, the cost of running your business will go through the roof as you are continuously forced to spend more money on acquiring new customers to replace those who have left.

A good base of retained customers gives you solid ground for consistent growth. As you’ll be adding more and more happy users to your service that provides a steady income enabling you to make budgetary decisions and plan to allow for further growth.

Therefore it makes sense that product performance should be very high on your KPI scale. Strong customer retention can also be a powerful driver of customer acquisition, as happy customers can turn into a devoted fan base and get you many valuable (and free) referrals.

There’s no such thing as overnight success.

The popular story on Instagram is that it was built in under two months and went viral in a matter of hours.

Instead of pushing hard on acquisition and hoping the potential users would magically stick, they resorted to analytics to find out how users were using the app.

Not that many people know that in 2010 when Foursquare was at its peak, two guys started an app called Burbn. Like Foursquare, it was a location-based app that let you check-in to places, earn points for hanging out, and post pictures.

Within the initial group of early adopters (mainly techies), it was pretty well received, but it was feature heavy, too complicated to work for the masses, and therefore had a massive churn problem when they attempted to grow.

Instead of pushing hard on acquisition and hoping the potential users would magically stick, they resorted to analytics to find out how users were using the app. Much to their surprise, it turned out that users didn’t bother with their fancy check-in features at all. They mainly used the app to post pictures and comment on others.

So they zeroed in on that one opportunity and created a brand new app that did just that thing — posted photos. Apply your filter, post, comment, like, done.

Burbn died, and Instagram was born, the rest is history.

Where are the opportunities?

As a business, you can dramatically lower your Cost Per Acquisition by spending more resources on maximizing value to your customer.

Here are some great numbers that were put together by Invesp

  • Acquiring a new customer is five times as expensive as retaining an existing customer.
  • 44% of companies admit they, “have a greater focus” on acquisition, while 18% focus on retention (the rest claim to have an equal focus).
  • 89% of businesses, “see customer experience as a key factor in driving customer loyalty and retention.”
  • The success rate of selling to a customer you already have is 60–70%, while the success rate of selling to a new customer is 5–20%.
  • “Increasing customer retention rates by 5% increases profits by 25–95%.”

Do you have any tips or thoughts about growing your product? Let us know in the comments.

Thanks for reading.

Joris Hoffman

+Drie is a strategic UX & UI Design Team that focuses on Growth and engaging Customer Experiences.