The Sage Course Companion on Marketing is an accessible introduction to the subject that will help readers to extend their understanding of key concepts and enhance their thinking skills in line with course requirements. It provides support on how to revise for exams and prepare for and write assessed pieces. Readers are encouraged not only to think like a marketer but also to think about the subject critically. It is much more than a revision guide for undergraduates; it is an essential tool that will help readers take their course understanding to new levels and help them achieve success in their undergraduate course.
The Leaky Bucket Theory
Customer retention is one of the key concepts in relationship marketing. Most companies concentrate on recruiting new customers to replace customers who move on, rather than seeking to retain customers. Andrew Ehrenberg coined the phrase ‘leaky bucket’ to describe this syndrome: in effect, firms are putting customers into a leaky bucket, and instead of preventing them from leaking away through the bottom of [Page 21]the bucket, the firm keeps topping up the bucket with new customers (Ehrenberg, 1988).
Figure 1.4 The leaky bucket
A study performed by the Cumberland Bank (Murphy, 2001) in the United States showed that the ...