Measuring Marketing

Chapter 81 Returns to Net Sales

Measurement Need

To measure returns from customer sales, which indicates rates of customer satisfaction/dissatisfaction.

Solutioni

Returns to net sales (RTN) measures the value of products that are returned relative to net sales:

$RTS=\frac{T_{rat}}{S_{nt}}\times 100$

Where

RTS = returns to net sales

Trat = total $ returns and allowances in time period t

Snt = net $ sales in time period t

To illustrate, a retailer has total returns and allowances of $30,000 in a one-month period. During the same period, net sales are $1,000,000. RTS equals 3%:

$\begin{array}{l}RTS=\frac{\$30,000}{\$1,000,000}\times 100\\ =3\%\end{array}$

Impact

A higher figure suggests that the retailer may have problems related to the quality of the products and/or ...