March 28, 2019

Customer retention vs. customer acquisition: Which is the more powerful growth lever for SaaS businesses in 2019? 🤔

There’s a hearty debate in progress in the SaaS world right now, and it boils down to this: should founders focus more on customer acquisition or customer retention? The answer, as you might expect, is complex. Both elements are vital to success and come with their own costs, challenges, and rewards.

Let’s start by being honest: no one really knows the answer. And maybe there isn’t even an answer. The two are often hard to separate- after all, you can’t retain customers that you don’t have.

As Katelyn Bourgoin put it, “I think one of the common myths in the retention vs. acquisition debate is that acquisition is the always the best growth lever. Of course acquisition is a critical driver, especially in the early days, but studies show that referrals are still one of the best growth channels.”

One thing that’s for sure, though, is that founders often misunderstand the impact that churn can have on their bottom line.