Q.Explain relationship marketing. Why is retaining an existing customer considered more valuable than acquiring a new one?

Relationship marketing treats a customer as a long-term relationship to be nurtured, not a single transaction to be closed.

Relationship marketing focuses on building and sustaining long-term, mutually beneficial relationships with customers rather than treating every sale as an isolated, one-off transaction. It is implemented through tools such as loyalty/rewards programmes, personalised after-sales service, regular communication, and customer-relationship-management (CRM) systems that record each customer's preferences and history.

Why retaining a customer is more valuable than acquiring a new one: acquiring a brand-new customer typically costs more (advertising, promotional offers, the effort of first-time persuasion) than continuing to serve an existing one who is already familiar with, and satisfied with, the firm. A retained, loyal customer also tends to (a) buy repeatedly over time, (b) be less sensitive to price differences because of trust and habit, and (c) recommend the firm to others, generating new customers indirectl …

Reducing relationship marketing to "just a loyalty card" — the concept is the broader long-term customer-orientation; the loyalty programme is only o …