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Expense of new customers vs. existing ones

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Expense of new customers vs. existing ones

Michael Lowenstein, VP and Senior Consultant, Customer Loyalty Management, Harris Interactive

Which is more expensive -- maintaining an existing customer or finding a new one?

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Studies have shown that the cost for acqusition, on a per customer basis, may be 5 to 10 times that of customer retention. Such numerical advantages also extend to winning back former customers. For instance, research has proven that there is a 5 to 20 percent chance of converting a prospect to first-time customer status, yet there is also a 20 to 40 percent chance of reacquiring a defected customer.

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This was first published in December 2003

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