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Customer Defection Calculator

The CEOs of U.S. corporations lose half their customers every five years. This meanshaving a customer defection calculator is a business necessity.

“What is the impact of customer defection to my brick and mortar business?”

Most businesses lose 10% or more of their customers every year. In retail it is closer to 20%. The majority of these could be saved if the business knew a customer was that unhappy before they defected.

Worse, 96% of unhappy customers won’t complain to you but will tell up to 15 friends.

 

“So how much is this costing the business?”

The defection cost is a mix of lost profit, and brand impact from negative online reviews. It is always much higher than the business thinks.

So,we developed a quick way to estimate the impact of this customer defection using Excel. The calculator quantifies the profit loss, then shows the ROI (return on investment) of feedback programs that can help stop this defection and of course, help halt the online complaints.

To get a copy of the Excel Customer Defection Calculator, click the button below.

Let us know what you think and how it can be improved.

Customer Defection Calculator - Current State

After the download, the first stage is to load in the figures for your own business. The calculator then quantifies the likely financial impact of customer defection to your business and the social media impact of negative feedback.

Customer Defection Calculator - after Opiniator

The next stage is to review the increase in profit and reputation when customer defection is improved. Specifically this is done using real-time feedback. The numbers are big and show that a focus on customer retention yields a higher return than on customer acquisition.

What is "customer defection rate"?
Every business suffers from customer defection – many services businesses have double-digit defection. Let’s say a business has an annual defection rate of 10% – if it had 100 total customers, then at the end of year 1 it would only have 90 left ie. 100 customers * 10%). At the end of the second year, the business would only have 81 customers left (90 customers * 10%)
What is the damage from customer defection?
Defection is really bad news as it has at least 4 major impacts on the business. 1) The business loses revenue and margin, 2: The business now has to spend to acquire replacement customers (known as the acquisition cost eg. advertising, coupons, special offers) 3: The defecting customer is likely going to a competitor which means his unit costs will decrease and 4: The defecting customer may well defect AND complain online – usually before you even know they were that upset. This means the business’ brand reputation. – declines. To get an approximate idea of the financial impact of defection on a business – use a defection calculator – like this one https://opiniator.com/customer-defection-calculator/
What causes customer defection?
The reasons for defection can be placed in two categories: ‘Business controlled’ and ‘Not Business Controlled’. The latter means the customer will defect for reasons other than low satisfaction eg. Move away, death, change to a substitute. BUT most of the time a customer will defect over a reason/facet of the business or controlled by the business eg. poor service, high prices, long queues. This is why on the spot customer feedback is required so that an unhappy customer will alert the business to the problem, thus allowing the business to fix the issue, even recover that unhappy customer

Feedback Resources to Deliver a Return

Get ahead of customer feedback and understand how to improve operations, lower HSE risk and deliver greater customer loyalty.