Customer Retention versus New Customer Acquisition

Why is it that we as marketers get sucked into the sexiness of acquiring new customers at the absolute expense of retaining existing customers? This in spite of many studies that have quantified the value of customer retention. For example, the study by Fred Reichheld of Baine Consulting who showed that:

1) Companies can lose up to 50% of their customer base over 5 years.
2) Acquiring a new customer can be 6-7 times more expensive than retaining an existing one.
3) Companies that increased retention rates by as little as 5% saw improved profitability from 5% upto 95%.

Baine amongst others has also published studies that demonstrate the clear link between customer loyalty and improved profitability. Some of it is quite simple really, depending on your cost to acquire a customer and the average revenue transaction they perform - it may take a few purchases for you to break even.

For example, if the customer acquisition cost is $50 and the average revenue transaction is $10 - then it takes an average of 5 purchases before you break even on just the cost of acquiring that customer. So that customer does not drive your profitability until the 6th purchase. Hmm.

And w/ marketers maniacally focused on new customer acquisition, companies continue to lose many of those same customers before they contribute to the company's profitability. So why do we continue to behave in this manner?

Here are some of my hypotheses:

1) When managers focus on growing their business as most of them are most of the time they tend to make the simple (yet often inaccurate assumption) that growth will be driven by new customer acquisition. As such they often ask for regular dashboards on "How many new customers have we added in the last month? quarter? year?" The assumption is that once we have found them - we will keep them. Right. Wrong. But nevertheless this continued scrutiny from general managers and sales managers on new customers drives the behavior of the marketers in the direction of new customer acquisition.

2) There is something innately more sexy about finding a new customer. Marketers are like hunters or fishermen/women. They get an immense thrill in the hunt and a tremendous sense of victory when they rope one in! Wow - what a great feeling that is. It just feels incredible - after all it is the reason we exist . Right? To help our companies find new customers. Well, yes. But that's not all.

What do you think? Why do marketers fall into this trap? And what can they do to avoid that?