Snap question for CEOs and decision-makers: What is the lifetime value of your average customer? Do you have this figure, in Rands and cents, at your fingertips? If you don’t, you’re probably not able to grasp the real cost of a lost opportunity if a customer’s call or request does not get the attention and service it requires. Arguably, failing to understand the real value of a lifetime customer can be equated to not understanding your company’s cash flow and annual expenses. Why? Simply because these numbers add up over time, and one lost customer (due to poor customer service or a missed call) can equate to many thousands – or millions – of Rands in lost revenue over several years. And let’s face it, few companies can afford to shed revenue (and customers) in such a difficult economic environment.
Let’s look at a telecoms service provider, for example, which would likely use Average Revenue Per User (ARPU) as its key metric in calculating opportunity costs and losses. If one user has a subscription service at R300 per month, then 50 of that same ‘category’ of users would be earning the company R15 000 a month and R180 000 per annum. Over five years, the earnings from just 50 users almost equate to close to R1 million. Now, what happens if that telecoms provider is missing calls from 10 of those customers and failing to provide resolutions to their queries? These users will simply move over to another provider – thus removing the potential lifetime value and creating churn for the original service provider (a double blow!). Not only will the original service provider not receive the annual revenue/ARPU from the lost customer, but it will likely not be recouping the costs of acquiring this user in the first place!
The moral of this tale? Firstly, understand the real lifetime value of a customer, and by extension, the true cost of a lost opportunity.
Once you have armed yourself with this information, you will perhaps be more determined and specific about ensuring that every customer touchpoint is well supported by world-class technology and world-class professional service. In an age in which there are multiple competitors across every sector and industry, there is simply no room for dismal customer service and the inability to achieve First Call Resolution (FCR). Admittedly, for South African businesses which are currently battling the physical restrictions of COVID-19, coupled with the crippling effects of load shedding, providing seamless and friction-free customer service (whereby no opportunities are lost) is a tough task.
Yet this is where we circle back to the ‘golden number’ of opportunity cost. If businesses fail to invest in generators and back-up power (along with mobile devices and data/access to connectivity) for key staff members, then the business is putting itself on an accelerated path to failure. On the other hand, by making sure that the business is always ‘online’ and customers always have multiple points of contact, it will likely recoup the investments made into back-up power and connectivity in several months.
Today, with the forced (and for many, permanent) shift to remote working models, we can now see that connectivity – and seamless customer touchpoints – will be the lifeblood for successful businesses in the ‘new normal’. This means that companies that are already making full use of Cloud environments and key tools such as Cloud telephony and unified communications are already way ahead of the game – as these tools are designed to enable swift and engaging customer service (and eliminate the possibility of any lost opportunities!).
With our new Telviva One platform, for example, users can make and receive calls (using the softphone app/Cloud telephony) from their desktop; view events and meetings; gain access to contacts and call histories; and view key business metrics, all from one place – without having to leave the platform and manage the complexity of having various tools. This is unified communications in action, and with this type of platform, you can then ensure that every conversation or interaction (with a customer, client, staff member, provider or any stakeholder) is a high-quality conversation. In other words, no time is wasted gathering information, because the key information and metrics are all there…at your fingertips.
In a world in which you may only get one chance to retain a lifetime customer, wouldn’t you want to have the best possible tools and information at hand?