...turning the voice of the customer
into management actions

Home >> Tools and resources >> Revenue at Risk

Tools and resources - calculating the value of customers and the cost of poor service

 Revenue at Risk Overview Lifetime Value Cost of Call-Backs Cost of Inaction Time Check

# Revenue at risk from problems

Research shows that there is typically a 25% drop in loyalty amongst customers who experience problems. Research also shows that as many as 35 - 50% of a company’s customers may be experiencing problems - even though only as few as 5% may actually complain to an organisation’s complaints department.

This calculator can help you estimate the potential revenue at-risk from the problems that customers experience

## How much of your annual revenue is at risk?

The potential revenue at risk can be calculated using the calculator below.

You can use the data in the example provided, or replace it with your own company data and re-calculate the results.

The white fields contain company financial data and the yellow fields contain data derived from customer experience baseline research.

### Step 1: Enter your data

 Enter your company data, or use our example: Financial data Research data • Total number of customers customers • Average annual revenue per customer \$ dollars • % customer who experience problems annually % • Drop in loyalty due to problem experience %

### Step 2: Calculate the risk

 Click on the “calculate” button: • Number of customers experiencing problems annually customers • Number of customers at risk due to problem experience customers • Annual revenue at risk from problems dollars

Research also shows that customers who experience a problem often tell between 8 and 15 other people about the problems they have experience.

 • Number of other people told of bad experience • Number of potential customers who hear about the problems customers

## What you could gain

### Step 3: Reducing the revenue at risk from problems:

The following calculator considers the possible benefits from three key strategies that reduce a company's revenue at-risk from problems experienced by customers:

Strategy 1:

Make it easier
for customers to
give feedback:

Strategy 2:

Improve the effectiveness
of customer response
processes

Strategy 3:

Learn from customers
and make changes to
reduce problems

### Fewer problems

From the calculations and assumptions above,
currently estimated as:
If you could increase the
percentage of customers who
have experienced problems,
who make contact for help:
By taking effective action
responding to the problems
they raise,
you might turn...
By learning about the problems they experience through effective research and taking action to reduce problems by:
%  %  %
dollars per year (Typically, feedback from customers
low as 5%)
of these back into
loyal customers.
Adjust the values in the yellow boxes to reflect your own projected improvements, and then... This could reduce your
revenue at risk by:
This could reduce your
revenue at risk by:

dollars per year.

dollars per year..

## Step 4: Your next step

This is only an indication of what a company stands to gain by achieving the projected improvements in these areas.

To get the hard facts for your company, let us establish a customer experience baseline for your organisation to identify and quantify current sources of customer dissatisfaction, estimate potential returns on service investment and set customer-driven improvement priorities for action and change.