Lifetime Value: Acquisition Costs Across Different Media

Marketers who emphasize prospecting over retention often fail to generate the profits from retention they need to cover the costs of prospecting. As a result, they are actually forced to grow more slowly by emphasizing prospecting than if they concentrated on generating profits from existing customers. The logic is simple—if existing customers return greater profits, spend more time on them to generate more profit, which then can be spent to convert new prospects, thereby growing your customer base and profit margin faster.