Customer Retention Strategies

Much marketing attention is directed at developing strategies to expand sales through market share dominance; market penetration; finding new markets, and product range expansion. The main reason for concentrating on these options is that size, revenue growth and dominance have been shown to be positively correlated with long-term survival and profitability. Recent work, however, has questioned the universality of the these approaches, arguing that the cost of winning new customers is high and that, for many organisations, it will be more cost-effective to concentrate on retaining existing customers rather than attracting new ones.