According to industry analysis, how many times more costly is it to acquire a new customer compared to retaining an existing one?

Acquiring a new customer is generally recognized in industry analysis as being significantly more expensive than retaining an existing one. The figure of five times more costly is commonly cited in marketing and business literature, highlighting the importance of customer loyalty and retention strategies.

This figure reflects various factors, including marketing expenses, sales efforts, onboarding processes, and potential discounts or incentives offered to attract new customers. In contrast, retaining existing customers typically incurs lower costs since they are already familiar with the brand and its products or services, leading to lower marketing and service expenditure.

Understanding this ratio emphasizes the significance of customer retention strategies in business, as investing in existing customers can often yield a higher return on investment compared to the costs associated with acquiring new ones.