It’s well understood in just about every business that acquiring new customers is almost always far more expensive than keeping existing ones. In fact, according to Harvard Business Review it can cost anywhere from five to 25 times more, depending on the industry.

Plus, the longer you can keep a customer, the more time you have to amortize the cost of acquisition. Devoting significant resources to earn a single new patron seems inefficient, but if you can keep them for many years and make repeated sales that investment begins to sound quite shrewd.

One analysis by John Fleming and Jim Asplund, authors of “Human Sigma: Managing the Employee-Customer Encounter” found that engaged customers generate 1.7 times more revenue than normal customers. Furthermore, having an engaged workforce as well bumps that number up even higher, to 3.4 times the norm.

Switchers and Nomads

There was a halcyon time in marketing when a newly acquired customer could be predicted to stick around for the long haul. The number of competitors was fewer and the barriers to exit were higher. Consumers were pretty much out of luck If they weren’t satisfied with their local merchants and professionals.

Today, technology has democratized and expanded access to just about everything. Customers need to merely pose a question to their vast social networks or type a few keywords into a search engine and they will be flooded by respondents, eager to win their business.

This change has given rise to a new type of consumer: Serial Switchers. These early adopters and brand nomads feel diminished loyalty to any one firm. They constantly seek out the newest, most-buzzed about option.

A Reason To Stay

In the face of that kind of sea change how do brands win long-term customers? They do it by continuously strengthening relationships.

The durability of a business relationship is dependent on several factors:

  • Satisfaction with recent experiences
  • Perceptions of quality
  • Value provided
  • Customer commitment
  • Bonds between parties

According to Robert Wolcott of the Kellogg School of Management:

“… [brands] earn loyalty by creating meaningful experiences across all contacts in ways that matter to customers.”

Businesses that can consistently meet or exceed their customer’s expectations build loyal, highly satisfied customer bases.

Or, as one marketing expert put it:

“Create a close customer relationship and it becomes far harder for that consumer to disengage from your business.”

Bonds that used to be strengthened by proximity are increasingly based on shared values and a willingness to listen. Customers expect their favorite brands to behave in a way that comports with their own outlook.

They also expect their prefered brands to be receptive to their input. A study by Apptentive found that: “97% of consumers said they are somewhat likely to become more loyal to a company that implements their feedback.”

This is why social media is such a powerful tool for customer retention. The tools to speak directly to your customer have never been more available or less expensive.


Serial switchers can be good for short term revenue generation and high growth strategies, but are inherently fickle and their patronage is fleeting. They also come and go so quickly that they don’t provide enough information for deep analysis of their behavior to inform future business decisions.

Loyal customers mean steadier income that offset customer acquisition costs, and they require less education to familiarize them with your system and offerings. And they also help via word of mouth referrals and brand evangelism.

The road ahead is clear. In an age when customer loyalty is diminishing, the brands that can court a loyal following will experience outsized rewards for their efforts.