Roughly 8 in 10 global marketers believe it’s cheaper to retain customers than acquire them, however only 15% of those marketers focus more on retention compared to new customer acquisition. The recent marketing survey of over 900 European executives was published by Econsultancy and sponsored by Oracle Marketing Cloud.
The reason the study gave for why companies spend more on acquisition was “while respondents feel that it may be cheaper to retain than acquire a customer, they estimated that almost half – 48% – of their revenues come from customer acquisition.”
But it’s a chicken and egg situation. If companies spend more on retention, their current customer revenues will be a larger slice of the pie.
Why don’t companies spend more time and budget on retention? It’s fun to chase the shiny new customer. The one who, early in the relationship, thinks you are great, beautiful, smart. They have no complaints, no customer service issues. Salespeople get higher bonuses for bringing on “new logos”.
Working through issues, listening to customer complaints and coming to consensus on “fair to both parties” is really hard work. But at the end of the day that customer chose your company and really wants to stay with you. It’s usually a lot of work for them to transition to another product or service company.
All companies could benefit from courting the tried and true along with the next best thing.