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  "Our Take"

(Past Editions by: Date, Title, Topic)

 
About "Our Take" 
"Our Take" is a collection of daily vignettes covering a wide range of CRM topics. It's an attempt to add our own spin to the world of CRM. We will use the column to share our perspectives, opinions, epiphanies, web nuggets, or quite frankly anything that moves us. Get ready to expect the unexpected. And, don't be shy about sharing your thoughts.
 
 
6/6/06 - Recruiting Versus Retaining Customers
Yesterday, I challenged readers to understand the ratio of investment in recruiting new customers versus retaining existing customers. The challenged prompted many responses around a common rule of thumb that finding a new customer costs more than retaining an existing one. Figures range wildly depending on the business model but new customer acquisition can cost upward of ten times as much as selling to an existing customer.
 
So today's challenge to you is to understand the cost of acquiring a new customer versus retaining an existing in the context of your business model. I realize that I've now given you two very large costing tasks in the last two days and I realize the effort will take much longer.
 
But understanding the cost ratio of recruiting versus retention and the current budget allocations associated with the two acts will provide powerful ammunition to make sure you are spending your customer focused dollars (euros, yen, etc.) properly. Today is a great day to start.
 
Gary Lemke, Publisher
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