A business that is able to build a higher level of customer retention can be more profitable than another business,even when both have the same market share.

Question

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Customer retention refers to the ability of a business to keep its existing customers. A business that has higher customer retention will have a stable customer base and will not need to spend as much money on attracting new customers. This can lead to increased profitability as the cost of customer acquisition is usually high. Therefore, a business that can build a higher level of customer retention can be more profitable than another business, even when both have the same market share.

A Business That Is Able to Build a Higher Level