High on the list of business platitudes is the stock phrase that it costs more to acquire a new client than it does to retain an existing client.
Statistics backing up the claim are difficult to find, yet you’ll find it repeated in various publications, including one that prides itself on business coverage: The Wall Street Journal.
Perhaps such widespread acceptance explains why a recent Journal print edition renewal featured a price of $385.29 for one year–only $7.41 a week!–yet the paper’s web site offered new readers the same subscription for $2.29 a week, or $119.08.
Following the logic of the old cliché, the Journal must calculate the cost of enticing a new subscriber at $266.21 more than retaining an existing one.
Should the Journal’s cost estimate for acquiring the new subscriber increase if the existing subscriber, who does not qualify for the lower price, feels unappreciated and decides not to renew?
What’s the value of an existing customer to your business? Do you know?