Retention of Customer Is Better Than Acquisition

Paper Info
Page count 8
Word count 2010
Read time 7 min
Subject Economics
Type Essay
Language 🇺🇸 US

In today’s dynamic and competitive world, firms strive to focus on activities to facilitate reciprocally beneficial exchanges. Firms confront grave challenges and search for opportunities. The firms focus on establishing multi-dimensional relationships with their customer so they could be viewed as partners. By establishing a successful partnership with the customers, marketers have ultimately discovered that permanent relationships are built on mutual commitment and trust. Since a lot of effort and time is required to create and maintain relations, it is more practical and profitable to adopt the strategy of retaining customers instead of acquiring new ones.


The paper aims to explore and scrutinize the marketing strategy adopted by the firms focusing on relationship marketing and the significance of endeavors to retain current customers rather than acquiring new ones.

Research Methods

The research will primarily focus on analyzing the secondary data available in theoretical books, journal magazines, and the internet. Based on the exploration made, deep analysis and in-depth opinion will be presented supported by authentic resources.

Literature Review

Marketing- A Dynamic Theme

The term marketing has continuously evolved and changed over a particular period. Marketing, in today’s competitive world,’ is primarily based on exceeding the expectations of the customer, not just satisfying rather delighting them. Continuous benefits are provided to the customers through a distinctive set of marketing tactics.

It is pertinent to establish the cognizance of the marketing theme. The marketing activities can be narrated as a management process specifically responsible for anticipating, identifying, satisfying, and exceeding customers’ expectations. The goals, objectives, and targets have to be set, monitored, and met. Strategies adopted by the competitors should be intimately observed, anticipated, and analyzed. (Mckenna, 211)

Through effective utilization of marketing research and market, a firm is in a better position to identify the needs and wants of target customers, enabling to deliver added benefits to enhance customer lifestyle and ultimately loyalty. Marketing can also be explained as a societal process in which not only individuals but groups obtain what is required by them through creating, offering as well as offering and exchanging value-added products and services. (Kotler, 8)

The modern marketing concept is based on three primary principles; customer focus- a starting point that the entire business decisions are interrelated with the needs and wants of the customer; involving all employees- to implement the marketing decisions and concept; and profit goals- an ultimate business organization goal. Businesses that have successfully embraced the theme of marketing have discovered that it has, in fact, a robust impact on sales. The profit should be reviewed by the organizations in marketing concept as an objective instead of just an accounting outcome.

Relationship Marketing

Customers have always remained the primary focus of the companies but the entire approach of business has been changed as it is viewed by the firms that the nature of the relationship is dynamic. Transaction marketing in the decade of 1980 placed the sign on the individual sale. However, relationship marketing particularly in the 1990s focused on individual customers and strives to establish and maintain the long-term relationship between the firm and customer.

Relationship marketing has become a fundamental theme in the modern marketing concept. The rise of relationship marketing to prominence is significant and has become a robust and unifying force specifically in the marketing disciples. Relationship marketing provides huge benefits to firms that can be pursued over the long term at a much lower cost. (Bejou & Palmer, 354)

It is pertinent to define the concept of ‘Relationship Marketing’. Relationship marketing can be described as establishing, enhancing, and maintaining relationships with customers as well as partners, to achieve organizational goals, so that the goals of the parties involved are accomplished. This is achieved by a reciprocal exchange and fulfilling related promises.

The core of the above-mentioned definition is attracting, maintaining, and developing customer relationships. The firms, to pursue the theme of relationship marketing, identity, maintain, and, where required terminate the relationships, with their customers as well as other stakeholders. Relationship marketing facilitates firms to enjoy a satisfying and profitable relationship to be established both for the customer and the firm by shaping and matching their needs over some time. It also considerably reduces the cost related to marketing as an outcome and proceeds to establish a more stable and loyal base of customers. The focus of relationship marketing is customer retention and development rather than the acquisition of new ones.

Relationship Marketing- A Key to Success

Acquisition of customers is significant for a marketer, but it is not an ultimate and primary focus. Relationship marketing facilitates establishing a satisfying and profitable relationship, both for the marketer and the customer, by shaping and matching their needs and wants over time, reducing costs significantly. The momentum of relationship marketing into prominence is generally ascribed to the outcome of convergent impact. These are the maturing of marketing themes, increased identification of potential benefits specifically for the customers and organization, and technological advances.

The factor of technological advancements is generally regarded as a prime driving element in the relevance and growth of relationship marketing. Scholars have identified numerous advantages of technology, particularly to the relationship marketer. These include; customizing services; tracking customer patterns; minimizing errors; ensuring two-way personalizing services and communication channels; and augmenting the nucleus of products or services. Other key factors influencing constant robust relationships with customers include; increased quality; enhanced competition; altering buying patterns; innovation, more sophisticated and demanding consumers; supplier partnering; the unpredictability of conventional marketing; and the inappropriateness of quality in itself to maintain competitive advantage.

A detailed input of the customer is regarded as a precious asset for any firm. This concept is directly related to the notion that a comprehensive understanding of customers over time is essential for the accomplishment of goals in the long term. Moreover, the competitive advantage can be gained effectively by developing long-term relationships. As such blend of skills is developed over time that will be valued and admired by the customers.

Customer Satisfaction and Relationship Marketing

Relationship marketing emerged in the decade of 1980 as a robust alternative to the existing concept of transaction marketing. Activities in relationship marketing are performed by the firms to attract, develop, interact and maintain profitable customers. The theme of relationship marketing aims at enhancing customer profitability while delivering value to the customers. Firms that maintain more stable relations with their customers effectively outperform their competitors. (Gummesson, 34)

However, relationship marketing will not directly lead to robust customer relationships; rather most of the customers will reveal diversified levels of relationship strength and closeness. For attracting and retaining customers, the relationship marketing strategies should increase the perceived benefits of the customers to engage them in permanent relationships. One of the fundamental doctrines of relationship marketing is ‘customer orientation. The customer-oriented marketing activities strive to increase the long-term satisfaction level of customers. The level of customer orientation has a direct impact on the relationship of the firm with its customers.

There is a positive relationship between customer satisfaction and product or service quality. In long-term relationships, the level of satisfaction and perceived quality are likely to merge into an assessment of relationship satisfaction. Customer satisfaction continuously increases customer loyalty. Customer loyalty, based on perpetual relationships, and satisfaction are highly correlated. Customer satisfaction within a firm is a good basis for loyalty.

Customer Relationship Management

In recent years, most organizations have successfully identified and recognized the need to focus more on customer satisfaction with the increased competition, particularly at the international level. Consequently, the concept of customer relationship management has surfaced as the top priority of most organizational strategies. (Greenberg, 54)

Customer relationship management is an extremely fragmented environment and contains different meanings for different persons. However, one view of customer relationship management is the utilization of entire customer-related data, knowledge, or information to deliver products or services. According to an opinion, the theme of CRM evolved particularly from business processes like relationship marketing and the continuous emphasis on the idea of customer retention with the help of managing customer relationships effectively.

The focus of relationship marketing inside Customer relationship management is fairly robust and has led firms to explore strategic measures for improving or maintaining customer retention. Another perception of customer relationship management is that is fundamentally technologically oriented. The advances made in database technologies like data mining and data warehousing are vital to the effectiveness and functionality of CRM systems. (Prahalad, 192)

Technological advances in international networks, improved interactivity, and convergence are termed as key to narrating the growth of e-commerce and CRM. The ever-increasing trend of using digital technologies by the customers, specifically the Internet, is altering the entire business environment and customer management. Customer Relationship Management can support organizations to excel in their abilities to achieve customer satisfaction and ensure customer retention.

Finding and Analysis

Relationship marketing is viewed by most companies as a fundamental theme in the modern competitive world in which the key to achieving organizational goals consists of being more effective than competitors. Its current popularity, at the global level, is basically because a permanent and enduring relationship is built between the customer and firm that positively impact the short-term as well as long-term objectives.

The research undertaken for this paper on the theme of relationship marketing signifies the phenomenon that the core of relationship marketing is simple and effective. The emphasis of relationship marketing is on the retention of the customer rather than acquisition and developing perpetual relationships over time. Modern approaches to the theme of relationship marketing have ultimately resulted in success through achieving customer satisfaction as well as retaining them.

The changing scenario of today’s business world, the intensive competitive environment, rapid advancements made in technology, and the overall increased customer expectations have significantly impacted the business environment. The marketing managers and the key decision-makers of the firm acknowledge the phenomenon that effective marketing requires something more than just a transactional approach. This change of thoughts and strategies has resulted in the implementation of the relationship marketing concept.

Relationship marketing specifically adopts the idea of focusing on customers and its primary benefits comprise increased customer retention; reduced costs increased loyalty and greater profits. It has therefore been discovered from the secondary sources explored for this purpose that relationship marketing strengthens customer loyalty which is an in-depth commitment to re-buy or re-patronize a product.

Given the benefits of relationship marketing and its overall status in the modern competitive world, continuous development, application, and understanding across different industries have been identified as significant elements in this paper. The ever-increasing popularity of relationship marketing themes and their effective application in the operations of the firm to ensure lesser marketing cost and increased profit through focusing on customer retention highlights a key marketing strategy for the firms.

In some instances, while researching this paper, it was found that efforts focusing on relationship marketing emerged from strategic imperatives or negative incidents to survive. However, most of the companies have implemented effective strategies for customer retention and through making efforts to transform mature customers for establishing a high-quality relationship.

It was confirmed from the exploration of data collected for this particular research that the vital element in the process of relationship marketing is its effective usage to remove all possible hurdles that could hinder establishing a perpetual relationship. Some of the barriers identified from the secondary sources were; restricted internal marketing; organizational structures, financial limitations, limited research, overambitious and nonrealistic targets, and last but not least the ineffective planning process. The phenomenon of marketing research seems to be an important consideration for the firms to establish a perpetual customer relationship as well as ensure customer retention instead of adopting a customer acquisition approach.


The customer has always remained the primary focus for the distinctive marketing activities for the organizations but the nature of the relationship is dynamic. Relationship marketing highlights the significance of individual customers. It could be concluded from the arguments presented in this paper, that it is much more beneficial for the firms to adopt the strategy of customer retention rather than acquisition to achieve organizational goals at low cost.

Works Cited

Bejou, David & Palmer, Adrian. “The Future of Relationship Marketing.” The Best Business Books, 2006, p. 354.

Greenberg, Jason. “CRM at the Speed of Light.”. 3e. McGraw-Hill Osborne Media, p-54.

Gummesson, Evert. “Relationship marketing and imaginary organizations: a synthesis.” European Journal of Marketing. 30(2), 34. 1996.

Kotler, Philip, “Marketing Management”. 12/E. Prentice-Hall, p. 8.

Mckenna, Regis. “Relationship Marketing: Successful Strategies for the Age of the Customer.” Basic Books. 2nd ed, p. 211.

Prahalad, Carson. “Harvard Business Review on Customer Relationship Management.” Harvard Business School Press. 2002, p-192.

Cite this paper


EduRaven. (2021, October 27). Retention of Customer Is Better Than Acquisition. Retrieved from


EduRaven. (2021, October 27). Retention of Customer Is Better Than Acquisition.

Work Cited

"Retention of Customer Is Better Than Acquisition." EduRaven, 27 Oct. 2021,


EduRaven. (2021) 'Retention of Customer Is Better Than Acquisition'. 27 October.


EduRaven. 2021. "Retention of Customer Is Better Than Acquisition." October 27, 2021.

1. EduRaven. "Retention of Customer Is Better Than Acquisition." October 27, 2021.


EduRaven. "Retention of Customer Is Better Than Acquisition." October 27, 2021.


EduRaven. 2021. "Retention of Customer Is Better Than Acquisition." October 27, 2021.

1. EduRaven. "Retention of Customer Is Better Than Acquisition." October 27, 2021.


EduRaven. "Retention of Customer Is Better Than Acquisition." October 27, 2021.