Statement–Argument — Should firms prioritize acquiring new clients? Arguments: I) Yes; new clients expand the revenue base and future growth opportunities. II) No; focusing on acquisition can degrade service to existing clients. Choose the strong argument(s).
-
Aif only argument I is strong.
-
Bif only argument II is strong.
-
CIf either I or II is strong.
-
Dif neither I nor II is strong; and
-
ENone of these
Answer
Correct Answer: If either I or II is strong.
Explanation
Introduction / Context:Customer-portfolio strategy balances acquisition and retention. Over-indexing on either dimension can harm long-run value.
Given Data / Assumptions:
- Acquisition feeds pipeline growth and diversification.
- Retention preserves lifetime value and referrals.
- Resources (sales, support) are limited and must be allocated.
Concept / Approach:Argument I is strong: growth often requires new accounts. Argument II is also strong: neglecting current clients can trigger churn and reputational damage. Each is independently persuasive; the optimal strategy is a balanced funnel with service SLAs.
Step-by-Step Solution:
1) I: revenue scaling rationale → strong.2) II: retention/service quality rationale → strong.3) Mark “either.”Verification / Alternative check:Firms often set separate teams/targets for “land” and “expand,” reflecting both arguments’ validity.
Why Other Options Are Wrong:“Only I/Only II” ignores the countervailing imperative; “Neither” denies basic business truths.
Common Pitfalls:Chasing growth while underfunding post-sale success management.
Final Answer:If either I or II is strong.