Question

One reason follow-up is so important is that research shows that the cost and effort to obtain repeat sales from a satisfied customer is roughly_____ that necessary to gain a sale from a new customer.

multiple choice
a. triple
b. twice
c. one-half
d. one-quarter
e. the same as

Answer 1

Follow-up is crucial since the cost to obtain repeat sales from a satisfied customer is approximately one-quarter of that needed for a new customer. It emphasizes customer retention and satisfaction, leading to increased loyalty and reduced costs for the business.

Step-by-step explanation:

One reason follow-up is so important is that research shows that the cost and effort to obtain repeat sales from a satisfied customer is roughly one-quarter of that necessary to gain a sale from a new customer. This cost differential is significant because it highlights the value of customer retention over customer acquisition. Acquiring a new customer involves additional expenses like marketing, advertising, and sales efforts to attract and convince someone to purchase. In contrast, repeat sales generally require less effort since the relationship with the customer has already been established, and they have a history with the product or service.

Consequently, businesses prioritize creating a positive customer experience to ensure satisfaction, which tends to lead to increased customer loyalty and repeat purchases. Efforts like customer service, product quality, and satisfaction follow-ups are essential strategies for maintaining customer relationships. The emphasis on customer satisfaction not only helps to reduce costs but also helps businesses to build a solid base of loyal customers, which can be more predictable and profitable in the long term.