Placing All Your Bets on Customer Retention? It May Not Be Enough
- RE Casper
- May 24
- 6 min read
Customer retention and robust loyalty programs are a good thing. After all, what marketer doesn’t know the adage about how less expensive it is to keep good customers vs. going after new ones.
But, here’s the uncomfortable truth most business owners don’t want to face: If you’re not actively and strategically pursuing new and conquest (your competitors’) customers, you may be losing the game.
The Math That’ll Keep You Up at Night – Some Simple Numbers that Pack a Punch
Meet Company A. They’ve got 500 customers, each worth $20K annually. They’re crushing it with 10% growth per customer each year. Sounds amazing, right?
But, they’re losing 5% of customers annually (because, you know, life happens).
Fast forward three years without acquiring a single new customer, and boom – their revenue drops by over 10%. Despite growing sales per customer, they’re actually shrinking.
Now flip the script. Same company starts nabbing just 50 new customers per year. Year three? They’re looking at 36% revenue growth instead of decline. That’s not just a difference – that’s the gap between thriving and barely surviving.
Take This Customer Acquisition Quiz to Get Some Insights Into Your Company’s Customer Acquisition Culture
If your new customer sales growth feels stuck in neutral, answering these six questions may shed some light on your weaknesses.
Do you have clear, measurable new customer acquisition goals and strategies? (Or are you just hoping for the best?)
Do you fully understand how your customers perceive your brand (and your competitors’)?
Does your corporate culture study and look at all competitors as potential threats? (Or, look down on and ignore competitors? Believe me. They’re looking at you.)
Are your marketing and sales teams in alignment and actually working together? (Or just occupying the same building?)
Are you actively targeting qualified new and conquest prospects with a real sales strategy? (Or just hoping you get a response)
Are you following up on leads, learning what works, and communicating feedback from leads with sales?
If you answered yes to each question, congratulations. You’re doing what’s right and well on your way to achieving new customer growth. If there are a lot of no answers, you probably have some work to do.
Why We’re All Addicted to “Safe” Customers
Let’s be honest – existing customers feel like a warm blanket. They know your name, they trust your product, and they don’t require PowerPoint presentations to convince them to keep buying.
New customers? They’re scary. They ask hard questions, demand proof, and sometimes ghost you after three follow-up emails. Plus, conventional wisdom says that acquiring new customers costs way more than keeping old ones.
But here’s what that “wisdom” doesn’t tell you: customer lifecycles aren’t forever.
People move.
Companies pivot.
Technologies change.
Budgets get slashed.
That “reliable” customer base you’re banking on? It’s slowly evaporating whether you’re paying attention or not.
Examples of Two Companies That Did It
When Netflix Schooled Blockbuster (And Everyone Else)
Remember when Blockbuster was basically the king of Friday nights? You loved them, but hated their late fees.
They had a simple strategy: keep the movies flowing and squeeze more money out of existing customers through late fees, candy sales, and “while you’re here” upsells.
Meanwhile, Netflix was methodically playing a completely different game. They weren’t just trying to serve existing video renters better – they were actively hunting down people who’d never even considered home entertainment subscriptions. Free trials, original content, digital innovation – they built their entire strategy around constantly feeding new customers into their system.
We all know how that story ended. Blockbuster became a cautionary tale, while Netflix became a verb.
Caterpillar’s Wake-Up Call
Even massive companies can get caught flat-footed.
During the commodities boom of the late 2000s, Caterpillar was living large, with a focus on their big core mining and infrastructure customers.
Then 2012 hit, and suddenly all those “reliable” big customers started slashing budgets. Because Caterpillar hadn’t fully diversified their customer acquisition strategy, they got squeezed with sales drops, inventory problems, layoffs, and a declining stock price.
The recovery strategy? They started chasing new customer segments – smaller contractors, rental markets, financing, e-commerce, parts marketing, and different industries.
Cat Rental Stores: A Targeted Acquisition Tactic Example
Through its Cat Rental Stores and increased production of compact equipment like mini excavators, skid steers, and backhoes, Caterpillar began targeting smaller construction companies, landscapers, and residential builders.
Because of seasonal use, these segments often didn’t purchase heavy equipment outright, but acquired equipment through rental. Beneficially, sometimes rental can serve the purpose of an equipment demo which can lead to long-term purchases or leases.
Here’s a Step-by-Step Guide to Developing a Customer Acquisition Plan That Actually Works
Step 1: Getting Your Teams to Actually Talk
Here’s where many businesses completely blow it: marketing and sales operating like they’re in different companies.
Marketing generates leads and tosses them over the fence. Sales complains about lead quality but never explains what they actually need. It’s like watching a really expensive, really slow train wreck.
When these teams actually align (revolutionary concept, I know), something powerful happens. You get a clear roadmap for finding, attracting, and converting the right prospects instead of just throwing something at the wall and hoping it sticks.
It’s a conversation, not a handoff.
Step 2: Know Your Sweet Spot
Stop guessing. Dig into your current customers and figure out what makes them tick. What industries are they in? Who makes the buying decisions? What problems were they trying to solve when they found you?
Step 3: Hunt Where the Prey Lives
Old-school but gold: Trade shows, industry events, and actual human networking. Yes, collecting business cards is still a thing.
Digital goldmines: Business databases such as Crunchbase, SalesIntel, LinkedIn Sales Navigator, ZoomInfo, InfoUSA, and DiscoverOrg offer robust directories of companies and key decision-makers. These aren’t just contact lists – they’re treasure maps.
Hidden gems: Trade association memberships, industry publication subscribers, conference attendee lists. These people are already raising their hands saying “I care about this stuff.”
Step 4: Craft Messages with Built-in Inspiration
Generic emails die in spam folders. Personal, relevant outreach gets responses. Use their actual name, reference their company, mention their specific challenges, offer a solution.
Subject lines that work: Create curiosity, urgency, or clear benefits. “Quick question about [their company]” beats “Amazing opportunity!!!” every single time.
Offers they can’t ignore: Free trials, exclusive demos, industry insights, training access. Give them something valuable before asking for something valuable.
Step 5: Close the Loop
Sales teams need training, insights, and clear messaging to convert leads effectively. Marketing needs feedback from sales about what’s working and what’s landing with a thud.
The Lesson
Even if you’re dominating your current market, you need to be constantly expanding your customer base.
Don’t get me wrong – keeping existing customers happy is crucial. It’s cost-effective and keeps the lights on. But if new customer sales acquisition isn’t part of your business DNA, you’re not building a business – you’re managing a slow decline.
The companies that thrive don’t just serve their current customers well. They’re constantly, systematically, relentlessly adding new ones to the mix. Because in business, standing still is just falling behind and new customer acquisition can fuel their future.
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