Increasing ROI Through Improved Customer Retention

Organizations lose millions of dollars each year through customer erosion. A worthwhile exercise is to determine a company’s cost to acquire each new customer and then replace the one lost. A 5% improvement in reducing customer erosion typically results in a significant cost savings. Try the following simple formula to calculate the savings opportunity at your organization:

• Determine the Number of Customers Lost Annually
• Calculate the Replacement Cost Per Customer
• Total Annual Cost = customers lost x replacement cost
• Calculate a 5% improvement