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  • Writer's pictureDr. Alan Grossnickle

Customer Retention

Customer acquisition should never be neglected, because existing business may decline for reasons outside of your control. Industry experience indicates, however, that existing customers make a comparatively greater contribution when marketing costs are taken into consideration.

Some considerations to consider:

  • Frequency- how often they purchase (regular customers are more likely to purchase in the future).

  • Recency- how much time has elapsed since the last purchase (recent customers are more likely to purchase again).

  • Amount- how much they spend (higher-spending customers are likely to be committed).

  • Category- what sort of product they buy (some products will be more profitable than others and some may be one-time purchases).

(Business, The Ultimate Resource, pp. 706-707)

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