In a customer retention strategy, which customer segment should be prioritized?

Prioritizing customers who spend the most and refer others is essential in a customer retention strategy because they contribute significantly to the company's revenue and have the potential to bring in new clients through referrals. These customers are often more loyal, have a higher lifetime value, and can act as brand advocates. When they refer others, they help to expand the customer base without the additional marketing costs typically incurred in acquiring new customers.

In contrast, focusing on those who frequently complain may lead to increased resource allocation in an area that does not guarantee increased loyalty or spend. Low-spending customers may not have the same potential for profitability compared to high-spending customers, making them a lesser priority for retention efforts. New customers, while important to nurture, have not yet established loyalty and may require a different strategy, such as focusing on onboarding and engagement, rather than retention. By focusing retention efforts on high-spending customers who also refer others, businesses can maximize their returns and build a more loyal customer base.