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Comment by icc97 | Hacker News Reader

I love this post - it gets across a fundamental concept that pretty much anyone can understand, which is non-obvious.

What I love, that other's here seem to grumble about, is that he's not using any specific terminolgy. He doesn't mention 'churn', he doesn't mention 'geometric' series, he only has one '=' in the whole text.

You can print out this article (ignoring the python bit) take this down to your local baker/cafe/<insert non-tech business owner> that's full of stupid marketing billboards but sucks at customer service and show it to them. There's a good chance they'll understand.

Frankly I liked it because I could easily follow his logic without slowing my reading. There was parity between my understanding speed vs my reading speed.

Plus no-one here seems to be grumbling that he's wrong, just that they can say it in a different way.

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What exactly is it that the local baker will understand? That he should avoid losing clients?

That maybe he should work on improving his cupcake recipe instead of expensive billboards, hiring a sales team, and wasting money on facebook ads.

Don't most people know this without math, that acquiring new customers is more expensive?

You might be surprised.

It's fairly trivial to find out where I work during the day but we are representative of the recruitment industry and so much effort is put into attracting and sourcing candidates (generally via expensive job boards). Because the cost tends to be less visible on the ground, there is no realisation around the cost/benefit ratio when compared to keeping existing candidates happy and using them.

Local business owners are hounded by marketing companies everyday promising the moon. Marketing seems like the great Panacea, but no one is reminding them that going over the top with current customers could potentially create a higher return.

$250/mo on Yelp ads gets a few dozen eyeballs on the business.

$250 in free product every month to regular customers creates Fanatics who tell ever, and could possibly get just as many of their peers eyeballs with a FB/IG post about their experience.

A lot of people forget the basics because it's not being sold.

Sure, but still, I don't see why you would need to look at asymptotes and convergence. It's enough to look at individual customers and ask the baker if he thinks it's easier to attract a new client than to stop an existing one from leaving.

Marketing != Advertising

Marketing should be just as much about retention as it is about acquiring new customers (neither of which is advertising mind)

I would guess a baker has more cost issues associated with the number of cupcakes that are tossed out do intermediate demand then on advertising.

People understand that saving is generally a good idea, but usually have a revelation of sorts when you show them the math of compound interest, and become more inclined towards saving. Introducing the concept of a steady-state customer base that's affected by new customers from marketing as well as by retention rate might have a similar effect.

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