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Customer Measures
Customer Attrition Cost
If you want to improve your customer retention, and you want to
know on which customer segment you should focus more, one way is
to maximize your efforts on customer segments having maximum attrition
cost. Customer attrition cost calculation and modeling can be very
simple to very complex. It can include:
- Cost of customer acquisition
- Cost of customer replacement (the additional cost over and
above acquisition to bring a new
- customer to the level of relationship enjoyed with attrited
customer).
- Cost of potential value lost
- Cost of bad references for high value client…
Typically the modeling is more complex for non-retail or semi-retail
kind of products and simpler for retail products.
Customer Attrition Cost measure can also have sub-measures as mentioned
above (Acquisition cost, Replacement cost)
Number of Customers
- Number of Primary Customers
- A primary applicant in home loan or a primary credit card holder
Number of total Customers
This includes primary as well as secondary customers (co-applicants,
supplementary card holder) and Number of customer groups (family
level..)
Customer Satisfaction Score
This measure is used to understand the level of satisfaction.
As mentioned in “customer Satisfaction Parameter”,
you would like to know the average customer satisfaction score on
sales experience for customers belonging to a specific location
and relationship value class, you will need to slice on following
dimensionsà”relationship Value”, “Location”,
”Customer Satisfaction Parameter” and use this measure.
Number of Customer Service requests/Complaints and Queries
This measure essentially provides the number of customer servicing
tasks across different dimensions (customer segments, time periods,
products, channels…)
Aging of Customer Complaints, service request or query (since logged)
This is a “balance sheet” measure, which provides
the status as on a given date. It gives the number of days since
a complaint, service request or a query is open. For example if
you want to find out on the average aging of the high criticality
complaints for high relationship value customers, you have to refer
to Dimension “Complaint Criticality” (High), “Relationship
value Class”(High Value) and use this measure.
Customer Cost
This measure is used in “customer cost and profitability”.
Customer cost measurement is again a subject of modeling. It can
include the following:
- Product cost: Cost of expenses as envisaged in the product design
- Customer Servicing and relationship cost: The cost of executive
time and relationship manager’s time.
- Fully loaded Customer Allocation : Allocating the overall enterprise
cost across the customer depending upon their segments, and products
which they are using.
Customer value/profit
This is a combination of customer value and cost. However it may
be used purely as a stand-alone measure where it is difficult to
calculate cost and it simpler to go for the aggregate measure of
profit.
Cost of customer service
The cost of customer service can be the aggregate of the following
measures:
- Cost of maintaining customer contact.
- Cost of Servicing customer complaint
- Cost of servicing customer query.
- Cost of servicing customer service request
All of the above for a retail business has to be done through a
model where one can apply some allocation methods. For example different
customer segment, channels and products drive different level of
customer service and hence the cost.
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