Global Lead, The B2B Institute
How do brands grow?
Do they grow primarily by acquiring new customers?
Or do they grow primarily by retaining current customers, who then tell other potential customers and lead to growth through word of mouth?
Most people believe the latter – b
rands grow through loyalty marketing campaigns that retain customers and encourage word of mouth growth.
That’s why we’ve probably all heard “common wisdom” such as:
• “it’s 5 times more expensive to acquire a new customer than retain a current customer.”
• “if you can reduce churn just 5%, you can grow profits 60 – 80%.”
It’s easy to understand why growing through current customers is such a popular theory.
It is simple.
It offers riches.
It warms the heart.
It hits all the right notes.
Presumably, such a widely adopted idea would be backed by multiple studies and ample evidence.
Interestingly, all of the evidence for loyalty …