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Impact on business-to-business sales performance

Research three (peer reviewed), articles on the customer to sales relationship. (attached 3 short articles).

Compare and contrast the cost of customer retention versus customer acquisition. Explain the different types of relationships for business-to-business and business-to-consumer in the presale and postsale in terms of the decision to buy and customer retention.


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Over past decades there have been conflicting views over the whether it is more important to acquire new customers or retain the ones that a company already has. Even though it is generally accepted that that these two selling techniques and customer relations are important for performance, when it comes to committing company's scarce resources on these relationships, various company's have taken differing approaches in doing so (Friend, Hamwi, & Rutherford, 2011). This paper seeks to compare and contrast the cost of customer retention versus that of customer acquisition and to analyze the different type of relationships for business-to-consumer (B2C) and business-to-business (B2B) in the presale and post-sale in terms of the decision to buy and retain customers.

Comparing and contrasting the cost of customer retention versus customer acquisition

Customer retention refers to maintaining continuous contact and good trading relationships with already acquired customers over along period of time while customer acquisition on the other hand refers to seeking new customers to sell products or services to and to add in the list of a companies product. Over the years past years companies have concentrated more on retaining customers than they have acquiring new ones as a sales strategy believing the cost of retaining an already existing customer is far less that the cost of acquiring new ones (Friend, Hamwi, & Rutherford, 2011). A report by Bain and Company found that over a period of five years if customer databases are let dormant, customers rates of attrition would as high as 50% with businesses that maintained good customer relationship and witnessed high retention rates showing a rise in their profits by as much as 95%, with the cost of acquiring a new customer being about six to seven times more the cost customer retention (Small Business Marketing Strategies, 2009).

Often companies have to determine what expenditures of acquiring new customers and retaining the existing ones makes sense to the business. It is imperative that knowledge on acquisition and retention costs, the new customer statistics and the ratio of initial profit to costs be thorough in order ...

Solution Summary

The impact on business-to-business sales performance is examined.