An important part of customer profitability is the cost to acquire a new customer. Bain and Company,

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An important part of customer profitability is the cost to acquire a new customer. Bain and Company, a consulting firm, estimated that the cost of obtaining a new customer in the consumer electronics industry is so high that the firm needs an average of more than four years of business from each new customer to break even. However, industry statistics show that more than half the new customers will defect before the four-year breakeven point. The numbers are similar for the apparel industry. Many firms are now trying to acquire new customers at less cost, through the Web.

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Give an example of a firm you know that uses the Web to attract customers and explain why you think the strategy should (or should not) work for that company.

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Cost management a strategic approach

ISBN: 978-0073526942

5th edition

Authors: Edward J. Blocher, David E. Stout, Gary Cokins

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