Customer defections have a great effect on profits.

Question

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Customer defections refer to the loss of existing customers to competitors or other options. This can have a significant impact on profits as it costs more to acquire a new customer than to retain an existing one. Additionally, loyal customers tend to be more profitable over time, as they tend to buy more and recommend the company to others. Therefore, losing customers can result in lost revenue and decreased profitability.

Customer Defections Have a Great Effect on Profits