Microsoft Word - Keeping Customers For Life (in Covid 19 Er…

Keeping Customers for Life The cost of customer acquisition is high, so the longer we keep the customer, the more we spread the cost over time. Additionally, the cost to replace a valuable customer is high, but failure to do so leaves a fixed overhead cost that is not covered. The longer the life of the relationship, the higher the net present value. Although we have always known that losing customers was bad, we have not had a reliable way to quantify the actual financial impact – and as long as revenue was stable or growing, it has been easy to overlook the incremental profits lost and the increased cost of sales caused by customer turnover.

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