Most business owners know how to calculate fixed costs—like rent and equipment—and variable costs— such as wages, utilities, materials, etc.— related to providing goods and services. But there is another kind of cost to consider. Lost opportunity costs. These are harder to measure but certainly are real. If a company has a bad online reputation or no reputation, a percentage of potential buyers will shy away and seek another vendor.
INPUT SECTION: VALUE OF A CUSTOMER
Enter your amounts in fields A, B, C, D, E, F and G (all are required).
A. Amount of Average Sale
How much is spent on one sale?
B. Number of Sales per Year:
How many times does he/she buy per year?
C. Number of Years a Customer:
How may years will customer keep buying?
D. Additional Customer Referrals per Year:
How many additional clients will he/she refer per year?
E. % of Referrals Becoming Customers:
What percent of those become customers (enter 50% as 50)?
F. Number of Negative Online Reviews Annually:
How many negative reviews do you have from the Reputation Report?
G. Number of Lost Customers per Review:
How may customers lost per negative review? Convergys says 30 per. You can put in less per negative review.
OUTPUT SECTION: COST FOR LOSING CUSTOMERS
Fields H, I, J, K and L are dynamically calculated from the input section above.
|H. Gross Sales per Year per Customer:|
|I. Total Lifetime Value of a Lost Customer:|
|J. Lost Revenue (Yearly Customer Value):|
|K. Lost Revenue (Monthly Customer Value):|
|L. Lost Revenue (Lifetime Customer Value):|
- 2009 Convergys Corp. Study: Single Negative Online Review can Cost the Average Business an Average Loss of 30 Customers
- 2011 Cone Online Influence Report: 80% say NEGATIVE online information changed mind about purchasing a product or service
- How Many Customers Could One Bad Yelp Review Cost Your Business?