For New Customers Only: A Study on the Effect of Acquisition Campaigns on a Service Company's Existing Customers' CLV

• We examine the effect of acquisition campaigns on existing customers' retention intention, retention and CLV.
• There is a positive effect of campaign attractiveness on retention intention.
• Aware customers have a significantly higher intention to stay and actual retention than do unaware customers.
• Aware customers do not have a significantly different CLV than do unaware customers.

This study examines the effect of attractively priced acquisition campaigns on retention intention, and subsequently CLV, of existing customers. The main finding is that customers who are aware of the acquisition campaigns both have a significantly higher intention to stay and do actually stay longer than do customers who are unaware of these campaigns. However, since CLV is not only influenced by retention intention but also by revenues and costs, it is found that aware customers do not have a significantly different CLV than do unaware customers. The inclusion of attractiveness of the offer as an additional explanatory variable results in a positive effect of campaign attractiveness on retention intention, i.e. if the customer thinks the acquisition campaign is attractive, the retention intention will be higher. However, the effect that is found for intention cannot be directly translated in actual behavior.