How to Grow When Client Acquisition is Costly

In almost all scenarios, acquiring clients and the costs associated with acquisition is exponentially more expensive than retaining exiting clients. (Some have measured client acquisition costs to be 7X more expensive.) It requires building a sales team and implementing a marketing strategy to attract new clients; and, depending on your sales cycle, this could take 9, 12, or even 24 months! Meanwhile, everyone around you has their version of how you should be doing this. But ultimately, if you want to meet strategic revenue goals, then you have to invest in gaining new customers, cross-selling, and retaining your existing customer base. While client acquisition is initially costly upfront, it does have its perks in the long-run.
Whether you’re operating in an emerging market or an old one, each presents different challenges to your go-to-market strategy. You either focus on going after as many available prospects or you do your best to hold on to the customers you have. Each circumstance is equally fun, but unique because you are challenged to engage your competition in a different way. Eventually, the dust settles in every industry and competitors begin to focus on customer retention and convincing your clients the solution they offer is far superior to the one offered by you.

Increase retention

In our research, we found that most companies have it backwards once their markets have matured. Far too many CEO’s, VP’s of Sales, CMOs continue to rely on what worked in the past rather than adopting to what will work in the future. They continue to focus on AXR (Acquire, Cross-sell, Retain) versus RXA (Retain, Cross-sell, Acquire). When you are in a mature market, reversing your thinking is critical to finding revenue growth. You are challenged to shift away from acquisition to protect and maintain the relationships you have. You should be focusing on RXA to yield greater returns.


Not so long ago, one of our partner’s clients was having trouble hitting their revenue growth targets. They were earning $16 million in annual sales and had a goal of growing to $20 million. To reach their goal they needed to make $6.1 million in new revenue, not $4 Million. (Don’t worry, my math is correct because they had an 85% retention rate in revenue.) That low retention rate was costing them $2.3 million in lost business every year before they even started. All their focus was on client acquisition, and it was causing their existing client relationships to suffer. To make matters worse their cross-selling efforts were only netting an additional $0.2 million in revenue. They needed a plan to make up for the additional $2.1 million they needed to earn to reach their goal of $20 million in annual sales.

Adopting a customer experience (CX) management solution and believing they needed to change, they were able to redirect essential resources and efforts and focus on building a world class retention and cross-selling culture that could achieve growth much faster through less work. By implementing CX methodologies, our partner’s customer improved their client relationships and even exceeded their growth goal by earning $26 million in sales, $6 million above their goal. Our partner was featured in an Inc. Magazine story “Fast Growth in a Slow Economy”. To add to that, the following year, our client continued to see success with their RXA strategy by hitting $36 million in sales.


When acquisition becomes too costly, business must learn to invest in their client relationships. While this is key in the B2C world, it’s even more so in the B2B environment because we’re not talking about a one-time $4 cup of coffee, but rather a $400,000 outsourcing engagement spanning multiple years (for example). This is key to finding success in the B2B world: learn who your clients are and what their business is so you can start creating better value for them. Make it hard for them to let you go or switch to another competitor. Learn to ask your customers questions; the kind of questions that lead to solving problems you never knew existed. Having healthy client relationships is a great differentiator to have over your competitors regardless of what market you’re in. Remember that relationships matter more than just sales dollars.

Client Acquisition Costs


Request a demo of our CX application and see for yourself the benefits of measuring the customer experience can have on your revenue and retention efforts !

Leave a Comment

Your email address will not be published. Required fields are marked *