Customer Retention Strategies

Abstract

It has been suggested that it costs up to five times as much to win a new customer as it does to retain an existing customer. The costs of capturing market share are not always easy to gauge, but there are many companies who now regret earlier strategies based upon the blind pursuit of volume. Whilst there is strong evidence for the link between market share and profitability there is equally strong evidence to show that it is the quality of that market share that counts. In other words, does our customer base comprise, in the main, long-established, loyal customers or is there a high degree of turnover or ‘churn’? If the latter is the case then the chances are that we are not as profitable as we might be.