ACCA Performance Management (F5) Certification Practice Exam

Which stage in customer relationship management focuses on maintaining existing customers?

1. Acquisition

2. Retention

3. Extension

4. Selection

The correct answer is: Retention

The focus of customer relationship management (CRM) on maintaining existing customers is termed "retention." This stage emphasizes strategies and practices aimed at building long-lasting relationships with current customers. Retaining existing customers is often more cost-effective than acquiring new ones, as loyal customers tend to spend more and require less marketing investment compared to new customer acquisition. Retention strategies can include personalized communication, loyalty programs, and after-sales support, all designed to enhance customer satisfaction and encourage repeat business. By cultivating strong relationships and providing ongoing value, organizations can improve customer loyalty and lifetime value, resulting in sustainable business growth. In contrast, the other stages, such as acquisition, selection, and extension, have different focuses. Acquisition deals with attracting new customers, selection involves choosing specific customer segments to target, and extension relates to expanding the scope of current relationships or product offerings to existing customers—but none of these primarily focuses on the critical aspect of maintaining relationships with those who are already customers.