Final answer:
It costs significantly more, usually five to twenty-five times, to acquire a new customer than to retain an existing one, impacting businesses' customer relationship management and marketing strategies.
Step-by-step explanation:
The cost of recruiting a new customer is generally said to be five to twenty-five times more expensive than retaining an existing one. This is a concept deeply rooted in customer relationship management and marketing strategy. Businesses, like the coffee shop example, need to ensure that the cost of acquiring customers does not outweigh the lifetime value a customer brings. In contrast, when companies like Netflix implement a significant price increase, they risk losing long-standing customers who are accustomed to the value proposition that initially attracted them to the service. Therefore, while the specifics can vary by industry, customer retention is typically much more cost-effective than customer acquisition.