In a previous blog post with the provocative title how to grow your competitor’s retail business and run yours into the ground, I was pretty graphic about the costs of bad customer service. That being said, I thought it worthwhile to do a few more calculations to really hammer home the costs:

The Costs Of Bad Customer Service

Example #1: One sale of $100 with $20 of revenue per month:

If a disgruntled customer tells 8 people (the minimum) the company will lose $800 in sales and $160 in revenue a month. That’s $2,400 in sales and $480 in revenue quarterly. It’s also $9,600 in sales and $1,920 in revenue yearly.

If a disgruntled customer tells 10 people (the median) the company will lose $1,000 in sales and $200 in revenue a month. That’s $3,000 in sales and $600 in revenue quarterly. It’s also $12,000 in sales and $2,400 in revenue yearly.

If a disgruntled customer tells 20 people (the maximum) the company will lose $2,000 in sales and $400 in revenue a month. That’s $6,000 in sales and $1,200 in revenue quarterly. It’s also $24,000 in sales and $4,800 in revenue yearly.

Example #2: One sale of $15 with a $5 revenue per week:

If a disgruntled customer tells 8 people (the minimum) the company will lose $120 in sales and $40 in revenue per week. The company will lose $540 in sales and $180 in revenue a month. That’s $1,620 in sales and $540 in revenue quarterly. It’s also $6,240 in sales and $2,080 in revenue yearly.

If a disgruntled customer tells 10 people (the median) the company will lose $150 in sales and $50 in revenue per week. The company will lose $675 in sales and $225 in revenue a month. That’ss $2,025 in sales and $675 in revenue quarterly. It’s also $7,800 in sales and $2,600 in revenue yearly.

If a disgruntled customer tells 20 people (the maximum) the company will lose $300 in sales and $100 in revenue per week. The company will lose $1,350 in sales and $450 in revenue a month. That’ss $4,050 in sales and $1,350 in revenue quarterly. It’s also $15,600 in sales and $5,200 in revenue yearly.

Can you afford NOT to have good or great customer service?!?!?

Stay tuned for ways to improve your customer service in future blog posts – if you can’t afford to wait, contact Positive Training Solutions <– by clicking here!