Measuring Marketing

Chapter 36 Customer Losses

Measurement Need

For planning and budgeting purposes, marketers need to see how many customers have been lost versus retained, so that future marketing plans can be adjusted to reduce losses.

Solutioni

Customer loss refers to the number of customers that stop purchasing a company’s products or services over a given period of time. The simplified formula below uses the same variables as that in the measure New Customer Gains, but the measure now focuses on customer attrition versus gain over the same period of time:

$Customerloss=C_{bt}-C_{et}$

Where

Cbt = number of active customers at beginning of time period t

Cet = number of active customers at end of time period t

Verizon, a U.S. telecommunications company, ...