Concept · Numerical Business Rules

5-25 Rule (customer retention profit)

Origin: Bain & Company / Fred Reichheld

Biological Parallel

Territory holders enjoy 5-25x reproductive advantage over floaters constantly searching for space—resident red deer stags defend harems while wanderers expend energy searching, fighting, and failing. Territorial defense is costly (vigilance, boundary patrols) but massively cheaper than perpetual territory acquisition, which involves dangerous combat, assessment errors, and failed invasions. The 5-25x multiplier emerges because retention eliminates search costs, reduces fight frequency, and provides local resource knowledge, compounding over time as familiarity breeds efficiency.