04-09-2014, 02:46 PM
When it comes to marketing, many services firms devote most of their resources to attracting new consumer. Efforts to retain existing customers are minimal, at least in so far as forma marketing programming is concerned. This view of marketing is needlessly and potentially wasteful. It is needlessly restrictive because firms benefit by keeping valued customers as well as by attracting new customers. Assuming equality in customer attractiveness, the firms that attracts 100 new customers and loses 20 existing customers for new gain of 80 customers is better off than the firms attracting 130 new customers but losing 60 for net gain of 70 customers.