Captive customers are a drain on a business's profits because the cost of acquiring them can never be recovered.

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Captive customers refer to existing customers who are unlikely to switch to a competitor due to various reasons such as high switching costs or lack of viable alternatives. They are actually beneficial for a business as they provide a steady revenue stream and are cheaper to retain than to acquire new customers. Therefore, they do not drain a business's profits.

Captive Customers Are a Drain on a Business's Profits Because