The trend toward growing current customers rather than just acquiring new ones is gaining speed, but many companies are still missing the ROI mark when developing customer-retention strategies. A new report, "Customer Retention Marketing," from direct-marketing firm Grizzard Performance Group finds that of the 10,000 senior-level marketing executives surveyed, 59 percent have a customer-retention program in place. However, respondents ranked mass-marketing strategies such as building loyalty among all customers and improving customer service as top priorities of those initiatives. Meanwhile, only 47 percent of companies differentiate their customers based on profit, and cross-sell and up-sell plans rank low on respondents' priority lists.

Blanket customer-retention strategies designed to improve loyalty among all customers fails to grasp the key component of a good customer-based strategy. Focusing on Most Valuable and Most Growable Customers will have the largest impact to a company's bottom line. "Many businesses don't understand that their retention program should center around the experiences and preferences of their most profitable customer segments, not the entire database," says W. Michael King, group VP of Grizzard.