When I joined BloomNation, the company was running two operations that were quietly at war with each other.
Out front, there was a large, expensive sales team, paid handsome commissions, whose entire job was to go sign up new florists for the marketplace. They were good at it. New shops came in the door at a steady clip.
Out back, there was a hole in the bucket. Churn was running around twenty-seven percent. The customer-facing team was purely reactive, a transactional support function that answered tickets and put out fires. There was no retention function at all. No one whose job was to keep a florist happy, growing, and on the platform. So the shops the sales team worked so hard to bring in kept quietly leaking out the bottom, and the company's answer to that leak was to spend even more on sales to bring in replacements faster than they were lost.
What they hired me to do was make the existing model run better. Improve customer service. Tighten up the support operation. And in my first weeks, sitting in meetings with the founders, I told them I didn't want to do that at all.
I wanted to take the reactive, transactional support work, the ticket-answering, and offshore it to a team built for exactly that. And then take the highly paid, talented people sitting in that Santa Monica office and train them up into something the company didn't have: a client success team, pointed not at putting out fires but at retention and revenue expansion from the florists we already had. I'm a certified client success manager myself, so this wasn't theoretical for me. I knew what that function looked like, I knew these people were capable of far more than answering tickets, and I effectively handed the whole team a promotion.
A couple of the founders looked at me like I was an alien. It sounds, on its face, like a lot of upheaval: offshore the support function, retrain the whole team, change everyone's job. But the math wasn't close. The cost of standing up the offshore support team and training the in-house staff into client success managers was significantly less than what the company was losing to churn, plus what it was pouring into sales to paper over that churn. We were spending a fortune on the expensive side of the ledger to compensate for neglecting the cheap side.
So we fixed the cheap side. Churn went from twenty-seven percent to under eight. We added value levers at the point of transaction that lifted average order value. We built re-engagement sequences for the consumer side too, the people coming to buy flowers, to bring them back and grow their lifetime value over time. Both ends of the marketplace, stabilized and compounding. The bucket stopped leaking, and the water already in it started to rise.
Here's the part I want you to sit with, because it's the actual point.
The thing that fixed BloomNation wasn't a clever retention tactic. It was noticing that the company had quietly decided acquisition was the answer to a retention problem. They were buying new customers to replace the ones they were losing, and they were doing it on purpose, at enormous cost, because no one had ever stopped to ask whether that was the right trade.
It almost never is. Acquisition is the most expensive way to grow a business. It's the one that costs the most in real dollars, and it's the one that gets the most attention, the most headcount, and the most incentive structure pointed at it, which means it's also the one that quietly crowds out the cheaper growth sitting right next to it. You can feel the imbalance in how companies are built. There's a sales team with a comp plan and a pipeline and a number on the board. There's rarely an equivalent function whose entire job is to make sure the customers you already won come back and grow. So acquisition is somebody's job, and retention is nobody's, and the predictable thing happens: the company grows by buying, because buying is the only growth anyone is actually responsible for.
This is the structural reason I gestured at in the last note. The money hiding in your existing customers doesn't stay hidden because it's hard to find. Part of why it stays hidden is that no single person at the company wakes up owning it. Acquisition has an owner. Expansion doesn't. So the expensive growth happens and the cheap growth doesn't, and the whole thing feels normal because it's how everyone's always done it.
I know how this sounds, so let me be clear about what I'm not saying.
I'm not anti-acquisition. Bringing in new customers is essential, and building the engine that does it well is a real part of the work I do. The problem isn't acquisition. The problem is sequence. Most companies reach for acquisition first, because it's where the attention and the infrastructure already live, and they reach for it instead of fixing the leak, not after. You cannot outrun a retention problem by acquiring harder. You can only spend more and more to stay in the same place, which is exactly what BloomNation was doing before we stopped it.
The right order is the boring one. Fix the bucket first. Build the function that keeps and grows the customers you already have. Get the business to a place where it holds water. Then turn the acquisition engine back on, and watch what happens, because now every customer you bring in actually stays and compounds instead of leaking back out. Acquisition layered on top of a leaky business is a money fire. Acquisition layered on top of a business that retains and expands is a flywheel. Same spend, completely different outcome, and the only variable is what you fixed first.
I've now watched this exact pattern at companies that have nothing to do with each other, which is how I know it isn't a BloomNation quirk.
Charity Auctions Today was, on paper, a completely different business. Not a florist marketplace, an auction platform for nonprofits. But the disease was identical. There was, when I arrived, literally nothing in place to bring back a charity that had run an auction on the platform before. Zero. Every single year, the company started from scratch, building a brand-new pipeline of nonprofits, as if the hundreds it had already served simply didn't exist. The entire growth model was acquisition, and only acquisition, forever.
So I did the same thing I'd done at BloomNation. I built a dedicated client success team whose job was to go back through the book of past clients and re-engage them. And what we found was a backlog of organizations that had loved the platform and simply forgotten about it. Nobody had ever called. The moment someone did, they came back.
That team ended up doing two things at once, and both of them grew revenue. They recaptured customers who'd lapsed, which was straightforward returning revenue. And they worked directly with those customers to help them run bigger, more successful auctions, so the average size of each auction kept climbing. Pair that with a value lever we added at the point of transaction, and the growth compounded on itself: more returning customers, each one worth more than before, each transaction monetized a little better. Revenue grew several times over in my first year, and the overwhelming majority of it came not from new logos but from customers the company already had and had been ignoring.
Meanwhile, new-customer revenue kept coming in at roughly the clip it always had. It didn't collapse because we stopped chasing it; it just stopped being the only thing holding the business up. The growth came from the side of the ledger nobody had been watching.
If there's one number worth putting on a dashboard after reading this, it's the split between the two kinds of revenue you bring in: revenue from brand-new customers, and revenue from customers you already had. Most companies track the first obsessively and the second barely at all, which tells you everything about where their attention goes.
Pull that number for your own business this week. If nearly all your growth is coming from new customers, that's not a sign your acquisition is working. It's usually a sign your retention isn't, and that you're spending the expensive way to grow because the cheap way is nobody's job yet.
Acquisition is how you grow a business. It's just rarely how you should grow it first.