It costs between 5 and 9 times less to retain an existing customer as compared to acquiring a new one. It’s also a lot less stressful than going “hunting” everyday.
When banks lend money to businesses they love seeing a stable and steady income stream. In some cases they prefer the steady income stream to a higher level of income that’s lumpy. Lumpy income represents higher risk.
There are many other reasons to chose a business model that favours customer retention over customer acquisition.
One of the best business models that lends itself to customer retention is the membership / subscription model.
We’re starting to see large corporates adopt this model increasingly. Have you considered it for your business?
Ash Roy has spent over 15 years working in the corporate world and collected an MBA (Masters In Business Administration) from the Australian Graduate School of Management along the way.
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