A few years ago we published a White Paper on the Cost of a Lost Customer, and why it is so important to resolve customer conflict. I had also written several articles about it. But, although the math is still sound (and somewhat scary), it is quickly becoming outdated.
We’ve created an exciting new calculator that you can use to identify both the real and potential cost of each customer you lose.
It begins, of course, by understanding your average CLV, or Customer Lifetime Value. This is a calculation of how much money your average customer is likely to spend with you over a lifetime.
As of this moment, 1 out of every 6 men, women and children are on Facebook (these are North American numbers – in some other markets these numbers are even higher), and each have an average of 130 friends. The average Twitter user has 128 followers and the average LinkedIn profile holder has 60 contacts. Now add to this all the blogs, Myspace users, YouTube watchers, etc, and you can start to see the enormity of our influence. “Word of mouth” has become “World of Mouth.”
The potential impact on a business when you start spreading the word about poor experiences is now huge, and that’s what this new calculator shows us. When you see the numbers, you may feel they are somewhat extreme. Okay, fine. If you don’t believe them, cut them in half. They are STILL big numbers. Even if you think I’m 90% full of baloney, they are STILL big numbers.
Or, on the other hand, you might be one of the over 10 million people who viewed United Breaks Guitars, and think that we’ve actually understated the cost of a lost customer….
