This article set me on a journey to determine how true it is and how powerful is the fact that retention is actually better than acquisition of new customers. Once i started on my research, I realised that many writers has debated on this topic and "Retention" seems to be gaining the upper hand with astounding facts that should have businesses jumping on this band-wagon. So, it surprises me when many businesses are not aware of it and do not have any plans or tools to even know who exactly their customers are. Hopefully, these facts that i have gathered and organised, would help to motivate actions that will exponentially grow their business.


  • It costs 5 times as much to attract a new customer, than to keep an existing one.


  • Increasing customer retention rates by 5%, increases profits by 25% to 95%.
  • 5% increase in customer loyalty would increase the average profit per customer by 25% to 100%.


  • The probability of selling to an existing customer is 60 – 70%, while the probability of selling to a new prospect is a mere 5-20%.
  • Existing customers are 50% more likely to try new products and spend 31% more, when compared to new customers.


  • Only 42% of companies are able to measure Customer Lifetime Value (CLV) accurately.
  • 76% of companies see CLV as an important concept for their organization


  • 50% of consumers changed their behavior to reach a higher tier within a loyalty program.
  • 69% of consumers is influenced by where they can earn customer loyalty points.


  • 57.4% join Loyalty Program to save money and 37.5% to receive rewards.
  • 64% of retailers say their loyalty program is the best way to connect with consumers.
  • 83% said Loyalty Programs make them more likely to continue doing business with certain companies.
  • 67% of customers said surprise gifts are very important for loyalty programs
  • Restaurant loyalty programs increase visit by 35%.
So do you end up spending all your resources on retaining customers instead? No! Of course not. However, picture this, every time you acquire a new customer , ensure he gets retained 100% then becomes a raving fan (i.e. An ambassador) that he brings in another friend to convert into another raving fan. While this is happening, you go out an grab another new customer. Let's say you stop for awhile in grabbing new customers because you didn't want to invest further in acquisition (as mentioned above, they are expensive!).
Pop quiz : how many customers would you now have? 
A) 3
B) 4
C) 5 
D) more than the above
At the first glance you should say 3, but the 2nd fan would grab another friend and your 3rd customer would grab another. So is the answer C) ? Yes. Until some time passes and you should easily get D). This proofs that retention can make your business grow much easier than acquisition. 
The above is just an example to proof that if you couple a great loyalty program with CLV with your great product and a customer acquisition marketing, your business would be rocketing exponentially!