Question

Which of the following statements regarding customer acquisition and retention is TRUE?

Question options:

a) Retaining current customers costs 50 percent more than acquiring new customers.

b) Retaining current customers is generally more costly than acquiring new customers.

c) There is no difference in the cost of retaining current customers and acquiring new customers.

d) Retaining current customers is generally less costly than acquiring new customers.

Answer 1

The correct statement about customer acquisition and retention is that retaining current customers is generally less costly than acquiring new customers, as it involves building on established relationships rather than creating new ones.

Step-by-step explanation:

When considering customer acquisition and customer retention, the true statement is that d) Retaining current customers is generally less costly than acquiring new customers. This principle is well-established in the field of business and marketing. Acquiring new customers involves outreach, advertising, promotional offers, and the uncertainty of reaching individuals who may not have prior engagement or loyalty to the brand. In contrast, retaining existing customers typically requires maintaining positive customer service, ensuring customer satisfaction, and engaging with customers to build long-term relationships. Studies have repeatedly shown that the efforts and resources required for customer retention are less than those for customer acquisition, often mentioning the cost of retention to be several times cheaper than acquisition.