Cost of Lost Opportunities Calculator

One Bad Review can cost you, 30 Potential Customers

Not all businesses get through their day without getting a bad review. It happens. But the way you respond to the negative reviews says a lot about your business and the way you treat your customers. Recent studies show that most people read negative reviews about a business and the way the business responds to them.

The big question is what does a negative review cost your business?

Fixed costs are easy to calculate. We all have expenses every month but it is much harder to actually calculate the cost of what a bad review costs. The cost of lost opportunity – the chance to serve a new customer is much harder to calculate. There have been recent studies that indicate a single bad review can cause you to miss thirty potential new customers.

Even a fairly low sales price for a volume business, especially one that relies on word of mouth to gain new customers has a lot to lose over the lifetime of a customer. 

For the sake of argument, let’s imagine that a carpet cleaner gets a bad review and on average that makes only 10 people not call. If they charge $79. for their service and they clean the average customer’s carpets twice each year they have a $158. sale annually. But if this customer stays with the carpet cleaner for four years and refers two additional customers per year, the business could potentially lose $56,880. for just one bad review!  

This loss of revenue can easily be over six figures when someone with a high ticket like an emergency restoration company or a dentist get a bad review. All it takes is a quick glance at the companies reputation online to make a fickle prospect turn to a competitor.

By using our lost opportunity – bad review calculator you can calculate what the real costs are including the lifetime value of a customer and the referrals that are potentially lost.

If you would like to learn more about how to get good reviews, download our free report, “Beginners Guide to Positive Reviews” and make sure you check out our review software – Mezingo.

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 a 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 referrals become customers (enter 50% as 50)?

F. Number of Negative Online Reviews Annually: How many negative reviews do you have?

G. Number of Lost Customers per Review: How may customers lost per negative review? Businesses risk losing up to 22% of their potential new customers with just one 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):

$

  • 75% of people don’t believe that companies tell the truth in advertisements.
  • 86% of consumers are influenced by negative reviews.
  • Businesses risk losing as many as 22% of their customers with just one negative review.
  • 2009 Convergys Corp. Study: A 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 their mind about purchasing a product or service
  • How Many Customers Could One Bad Review Cost Your Business?