The Hidden Cost of Losing a Customer Why Customer Retention Matters January 30, 2024 According to Marketing at Work, the average business loses about 10 to 25 percent of its customer base per year. This doesn’t necessarily mean new customers aren’t replacing the old, but rather that repeat business is diminished and the company is forced to spend time and money attracting new business. Every customer that walks away represents a significant financial setback and missed opportunities for your business. Yes, there is the immediate loss of revenue. But, it’s not just the one-time transaction you lose; it’s potentially years of future sales. So why is acquiring new customers so often the primary focus for companies looking to grow and thrive? While new customers are definitely important, it’s crucial you don’t overlook the cost of losing existing customers. To replace a lost customer you need to invest time, effort and resources into finding a new one. Marketing, advertising and sales efforts all come with their own set of expenses and they quickly add up. Acquiring one new customer can cost up to 5 times more than the cost of retaining an existing customer. Increasing customer retention by 5% can increase profits from 25-95%. The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%. When you bring all customer information into one system, you make customer service and customer retention a lot simpler, faster and consistent. Integrating strategies for personalized marketing, loyalty programs and subscription purchasing arrangements further increase customer purchase frequency and customer stickiness.