True or False: Customer acquisition costs often exceed customer retention costs.

The statement that customer acquisition costs often exceed customer retention costs is generally considered true in business practices. This is due to several reasons related to the nature of acquiring new customers versus retaining existing ones.

Acquisition costs encompass all the expenses associated with attracting and converting new customers. This includes marketing efforts, promotions, advertising, sales team salaries, and any other costs related to outreach and engagement strategies. These expenses can be substantial, especially in competitive markets where businesses are vying to capture new clientele.

On the other hand, customer retention costs typically involve activities aimed at maintaining existing customer relationships and encouraging repeat business. These can include customer service, loyalty programs, and engagement initiatives, which, while important, usually represent a smaller percentage of a company's overall budget compared to the costs needed to acquire new customers.

Research and industry data often support the notion that it is generally more economical to retain existing customers, as loyal customers tend to have a higher lifetime value and are less costly in terms of marketing efforts than new customers. Therefore, the assertion that customer acquisition costs typically exceed customer retention costs aligns with common business insights and financial models.