Results on increased revenue
The amount of customer questions and satisfaction ratings is translated into tangible revenue to make the return-on-invest apparent. When done right, customer service becomes an additional revenue driver.
In the diagram below we have highlighted the results after applying previous actions. The amount of total customers at risk has decreased dramatically. Multiplying the amount of customers at risk with the value per customer gives an indication of the potential revenue increase for a company.
In the majority of organisations the 1-year or 3-year value of a customer far outweighs the customer service cost for that customer over the same period.
On a customer base of 100.000, the applied actions have brought down the total customers at risk from 4600 to 3090. Let's have a look at the financial impact by making following assumptions:
- Let's say the gross 1-year profit for each customer is € 250 (= the customer value)
- A customer question comes at a cost of € 10 per question. (= cost incurred by customer service)
It means that:
- there are 1510 customers retained (= 4600 - 3090)
- resulting in an incremental profit of € 377.500
- allowing for an investment budget up to € 377.500 while maintaining a return-on-invest higher than 100%!
