The statement is true. It’s easier AND cheaper to hold on to, up-sell, encourage your existing customers rather than look for new ones…..
This is an article I read in Forbes that sums it up nicely……
Yes, of course, gaining customers and/or market share is inevitably a goal of every marketing campaign and communications effort we undertake.
But as you go about crafting those efforts, make sure you are paying attention—and, I would argue, a lot of attention—to the customers you already have.
There are three key reasons.
1. If you gain a customer through your marketing efforts but lose one you already had because you weren’t paying enough attention to her, you end up with the same number of customers—but lower margins–because it costs far more to gain a new customer than to keep an existing one.
So, staying even—by adding one customer to offset every one who goes away—is actually causing you to lose ground (in the form of decreased profits that come about through increased marketing costs). That is no way to run a business.
Contributor – Forbes