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Customer Retention Cost
The expenses incurred to keep a customer from leaving a company, often contrasted with the cost of acquiring a new customer.
Implications
The total cost associated with retaining an existing customer, including loyalty programs, customer support, and targeted marketing efforts, often compared to customer acquisition cost to evaluate the efficiency of retention strategies.
Example
Example: A subscription service calculates its customer retention cost by adding up the expenses of its loyalty rewards, customer support team, and re-engagement campaigns, using this data to optimize its retention efforts.
Related Terms
Different from customer acquisition cost, which focuses on gaining new customers, retention cost focuses on the resources needed to keep existing customers.
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