Friday May 21st, 2021

Well… #3: Customer Acquisition or Relationship Management?

“One of the most common mistakes made by companies

looking to increase their profits is to focus on attracting new customers. Usually, this behavior tends to reflect the history of the company. In the beginning, it probably had no customers or very few. To survive, it had to win new clients. Increasing the number of new customers, therefore, made sense.

For companies that no longer have to fight for survival but want to increase their profitability, on the other hand, acquiring new customers is not the best strategy. Studies by Capgemini and the Gartner Group have shown that, depending on the industry, it costs three to seven times as much to acquire a new customer than to get an existing customer to buy something again.

The biggest opportunity to increase profitability is to improve relationships with your existing customers.

Strelecky, John: Big Five for Life.