Keeping Existing Customers is NOT Always Better than Acquiring New Ones!

Customer Loyalty
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Annalisa Cordoba
Manager, Spain

Keeping Existing Customers is NOT Always Better than Acquiring New Ones!

🔥NEW A fundamental assumption of customer loyalty models is that keeping existing customers is less expensive than acquiring new ones. Buchanan and Gilles (1990) provided several reasons why increased profitability is associated with customer retention efforts (see the summary of customer loyalty).
But I wonder, are there also circumstances in which keeping existing customers is equally or more expensive than acquiring new ones?
My thinking is for example that in the internet age, the costs of acquiring (new) customers may be so low, that avoiding the hassle of keeping existing customers may be a better option sometimes.

  Jaap de Jonge
Editor, Netherlands

Keeping Existing Customers is NOT Always Better

I agree with you.
On top of the internet example you give, you can also think of existing customers that are (no longer) profitable. It would be better to say goodbye to these customers. Be careful though not to say goodbye too soon or to too many customers.

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