— On Comms Design. From London

Byron Sharp is right about one thing

how-brands-grow1Retention is never cheaper than acquisition. It actually never has been.

And interestingly (and this is where I wholeheartedly agree with him), this IS one of the most often mentioned myths of marketing. People DO say and believe that retention is cheaper than acquisition. I, like many, took this at face value and never stopped to question it. The enormity of this misconception strikes you, though, the minute you do stop and think. The logic of the statement does exist: once you’ve established a relationship with someone, they are more likely to choose you. It kinda makes sense. But then you realize

how stupid it would be if you really believed this. Somebody has bought you twice and then they are more likely to buy you repeatedly so keeping them interested is cheaper? No, not really. This would mean that you spend less on targeted comms to a smaller base of people with customized messaging to all. Which you NEVER do. Most companies do not have a data base of segmented customers. Most companies do not have a customized rewards system that is also meaningful. Most customers do not want to receive repeat comms from brands they buy. That these things happen is a myth.

In reality building accurate data bases, maintaining them, building a business of rewarding loyalty, segmenting your marketing into retention and acquisition is more costly than a big TVC campaign nation-wide.

Sharp is right.

That, however, does not mean we should not do retention. But we need to understand that retention is not a way to grow but rather a way to not shrink. And retention is necessary because after a while growth is mostly about stopping defection and not about adding more people to your share.


This is one of what will be a series of articles about How Brands Grow. Because it’s just too cool right now 🙂