What is generally considered to be more cost-effective for a business?

Keeping current customers is generally considered to be more cost-effective for a business because acquiring new customers usually requires significant investment in marketing and sales efforts. Retaining existing customers is less expensive than attracting new ones, as the relationship with existing customers has already been established, and they are often more likely to make repeat purchases. Additionally, satisfied customers can become brand advocates, helping to attract new customers through positive word-of-mouth at little to no additional cost.

Maintaining existing customers also allows businesses to foster loyalty, which can lead to higher lifetime value from those clients. This is especially important in competitive markets, where keeping a customer can often translate into sustained revenue, while acquiring new customers may take time and resources without immediate returns.

In contrast, acquiring new customers involves not only direct costs related to marketing and outreach but also the time and resources needed to convert those leads into actual sales. Therefore, focusing on customer retention strategies, such as loyalty programs or personalized communication, typically yields a higher return on investment.