Business Commons^™

Customer Acquisition And Retention Spending: An Analytical Model And Empirical Investigation In Wireless Telecommunications Markets, Sungwook Min, Xubing Zhang, Namwoon Kim, Rajendra K. Srivastava

Research Collection Lee Kong Chian School Of Business

Strategic resource allocation in growth markets is always a challenging task. This is especially true when it comes to determining the level of investments and expenditures for customer acquisition and retention in competitive and dynamic market environments. This study develops an analytical model to examine firms' investments in customer acquisition and retention for a new service; it develops hypotheses drawing on analytical findings and tests them with firm-level operating data of wireless telecommunications markets from 41 countries during 1999-2007. The empirical investigation shows that a firm's acquisition cost per customer is more sensitive to market position and competition than retention …