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Firms Need to Switch CRM Focus To Retaining Customers, Gartner Says

Only 9% of financial firms make retaining customers the No. 1 goal of their customer relationship marketing (CRM) systems, a survey by GartnerG2, a division of Gartner, showed. But particularly in today's economy, customer retention should be the foremost goal of any CRM system, Gartner maintains.

Instead, 43% of firms' CRM systems focus on customer acquisition.

"Customer retention should be the first line of defense in a financial service provider's CRM strategy," said Kim Collins, research director at GartnerG2. "However, most financial service companies do not even have a clear definition of customer attrition, much less a way to accurately identify and respond to early warning signs that a customer is likely to exit."

Collins also noted that it costs $287 to acquire a new customer, versus $57 to keep one.

Gartner conducted the survey of 117 financial service firms over the course of the first quarter via the Web.