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Is it cheaper to keep old customers or get new customers?

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Answered 2009-03-13 20:45:08

The answer to your question depends entirely upon what you need to do to keep old customers versus what you need to do to get new customers. It also depends on your industry. As a lawyer, I get a lot of business by word of mouth. I keep my old clients by giving good service. I get new clients by advertising, owning a website to market my firm and by participating in forums like this. I get new likes from referals form existing clients. I can't say there is a definitive answer to your question. It might requiress less EFFORT to retain existing clients, but that doesn't necessarily translate to a valid cost comparison.

It also depends on what it is you do for a living? If you are like me and you specialize more in Outside sales or Executive outside sales, most of the time it costs more to keep the existing customers. But you DONT EVER want to just focus on the cheaper way to go. Or to just focus on new customers. Since its the existing customer base that will be the ones making the big purchases, giving you referrals and things of that nature.

But in this line of sales its not out of the ordinary to be buying them fancy dinners/lunches, buying them drinks, taking them on trips, etc....and that can get real expensive real quick.

== == Additionally, in marketing terms, it's said that it's eight times more expensive to get a new customer than to keep an old one. If you serve a customer well, they will be a repeat customer. It costs more from an adverstising and time standpoint to generate new customers.

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