The Cost of Losing Customers: When customers leave, they take to competitors money that would have been yours. If you keep your customers, you keep the money.

Your Average Revenue/Customer	X	# of Customers Who Leave Your Organization ANNUALLY	=	$/Year in Lost Revenue
$	X			$

The Cost of Bad Service: Highly effective companies spend about 10% of their operating budgets on reworking and fixing customer problems caused by poor service. Ineffective companies spend as much as 40% of their operating budgets on the same thing. Improved customer service can create significant savings in this area.

Your Operating Budget $	X	The Percentage of Your Operating Budget Spent on Fixing Customer Problems	=	$ Your Organization Wasted in Fixing Bad Customer Service
$	X	%		$

The Cost of Replacing Your Lost Customers: Before growing market share by one customer, a company that is losing customers must pay the price to make up lost accounts. Retaining existing customers saves part of this cost.

The Cost of Turnover: Losing customers is highly correlated with employee turnover. Improving customer loyalty requires improvements in employee retention, which results in added savings.

* Mathematical equations courtesy of TARP

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