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

Lifetime Value

Overview

Revenue at Risk

Cost of Call-Backs

Cost of Inaction

Time Check

Lifetime value of customers

Since 100% of your profits come from your customers, their loyalty can add up to a lifetime of value for your company. The following calculations give some insight into just how important this can be. Use the data in the example, or replace it with your own company data and re-calculate the results.

This calculator can help you estimate the lifetime value of a customer

How much is one of your customers worth?

A good start in calculating the potential cost of poor service is to estimate the lifetime value of your average paying customer.

  

Step 1:

 

Enter your company data, or use our example:

• Average number of purchases made by a customer each year   purchases per year
• Average value of each purchase $   dollars per purchase
  • Average period of loyalty of your customers   years

 

Step 2

 

Click on the “calculate” button: Point  
  • Lifetime value of a single customer    $   dollars

 

On average, this is what your company stands to lose for each unhappy customer that goes away.