the new buzz words are clear: customer experience, customer loyalty, customer advocacy, etc. we all now know what we should be doing in theory to retain customers and build our revenues. we focus on the fact that it costs 7 to 10 times more to gain a new customer than keeping the oldies.

but, just for a few minutes let’s examine the true cost of losing a customer. it only starts with the fact that we no longer see their money.

i’m going to write about an ongoing problem i have with one of my vendors. now, normally i never talk trash (because usually i use the opportunity to gain the problem vendor as a customer), but i have given every chance for this company to fix a simple problem. i can’t even get a response. so, without naming names (T-MOBILE), i will spell out the true cost of losing me as a customer, or even worse, holding me hostage as a customer.

my account with T-Mobile has been active for over 10 years (that is 3 times longer than i have known my wife!). i’m a perfect customer. never leave. pay my bills on time, etc. however, about a year ago i used my upgrade “discount” to buy my wife and i brand spanking new, state-of-the-art, T-Mobile Wings. these wings are absolute garbage. i have been through over 7 phones that have failed due to bad touch screens, no signal, and other unexplainable defects. this phone has done everything possible to make me angry short of calling my mom and letting her know the things that i do that i shouldn’t.

now, maybe i just have the worst luck in the world with phones, or maybe the phone heard a few things that i said about it when it was pretending to be broke down, and now it has it out for me, and tells his new replacement friends that are en route via a $20 FedEx package what a jerk i am. as far as the customer is concerned, this doesn’t matter.

T-Mobile refuses to replace the phone with anything better than something your 10 year old would be embarrassed to carry (imagine Zach Morris and his first mobile phone). whether i am right or wrong matters little. it’s my expectations versus reality.

now, let’s examine the true cost of losing me. i am calling them next week to pay my cancellation fees. they had me on contract for another 12 months at $200 per month. so, $2400 – cancellation fee = $1900 lost. that’s the easy equation.

before we can determine the other costs involved, let’s go through a day in the life of Angry Joe Customer (me). today, i spent over 90 minutes on the phone with T-Mobile. my favorite part of the day is my early morning coffee and planning step by step my calls, appointments, etc. for the day. as nice as the girl was at T-Mobile, i didn’t want to talk to her, but i had no choice as my phone didn’t work.

after having all of my calls forwarded to my house phone as to not miss any, i realized that my trip to the gym would have to be without my phone, as well as the grocery store, and everywhere else i planned to go that day. i’m ashamed to say it, but this is quite limiting for me.

after my trip to the gym, i came home and returned all of my missed phone calls. four, to be exact. do you think i told them exactly why i wasn’t at my phone? of course i did. and i told them the problems i have had for a year now. there is 4 people right there that i guarantee will think twice about using T-Mobile. hmmm…..opportunity cost….4 people times $1200 per year would equal $4800, right?

now, multiply the $4800 times the number of times my phone has gone down and i’ve had to explain why i’m unable to be reached….that would be 7 x $4800, or $33,600.

ok. starting to look a little more expensive than the original $1900 they would be losing with me? if we then take into account that i tell people how i feel about T-Mobile every chance that i get, this is an astronomical loss.

not to mention that now i am sitting here writing a blog about it. i have 4,366 people in my Linkedin network alone, and each connection will get an e-mail about my new blog post. the internet has changed things. a company cannot afford this.

my point was not to bash T-Mobile, which admittedly was a bonus that i accomplished in this blog (i feel better, how about you?). my point is that companies need to see the true cost of losing a customer.

granted, not all of them will be angry when they leave a company, but they did have a reason for leaving, which means at best they will say, “yes, they did a good job, but i found this over here which was even better.”

the truth is you can’t keep everyone. but, it’s always worth a try. keep your customers.

if you need someone to tell you exactly which customers you are at risk of losing, i’m your huckleberry.