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Acquisition and Retention Management

  • Robert C. Blattberg
  • Byung-Do Kim
  • Scott A. Neslin
Part of the International Series in Quantitative Marketing book series (ISQM, volume 18)

Abstract

While customer acquisition and retention programs are important in their own right, the firm needs to manage acquisition and retention in a coordinated fashion. This chapter addresses how companies should allocate their efforts to acquisition and retention. We discuss the models that are relevant to this task, and then optimize several of them to demonstrate their value and gain insights on when the company should allocate more resources to either acquisition or retention. We show for example that the adage, “It's cheaper to retain than acquire a customer, so we should spend more on acquisition,” needs to be sharpened considerably before it can be used to guide acquisition and retention spending. We conclude by introducing the “Customer Management Marketing Budget,” a tool for planning acquisition and retention expenditures over time.

Keywords

Marginal Cost Retention Rate Average Cost Acquisition Rate Customer Base 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  • Robert C. Blattberg
    • 1
    • 2
  • Byung-Do Kim
    • 3
  • Scott A. Neslin
    • 4
  1. 1.Kellogg School of ManagementNorthwestern UniversityEvanstonUSA
  2. 2.Tepper School of BusinessCarnegie-Mellon UniversityPittsburghUSA
  3. 3.Graduate School of BusinessSeoul National UniversitySeoulKorea
  4. 4.Tuck School of BusinessDartmouth CollegeHanoverUSA

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