By Elizabeth Ziemba, President, Medical Tourism Training, Inc.

Do you know the real cost of getting, losing, and keeping customers?

Missed Opportunities, Lower Revenues

This is the second of three articles exploring the costs associated with getting, losing, and keeping customers. The first article focuses on the cost of getting clients. If you missed it, please take a moment to read it now.


This article explores the true costs of losing clients. The third article will offer suggestions and solutions for keeping more of the clients you attract.

Costs of Losing a Customer

In the previous article, we discussed the direct and indirect costs of attracting customers. Losing customers also has direct and indirect costs to your business. The costs to your business of attracting or losing customers are two sides of the same coin and essential information to smart management decisions.


Direct Costs


The first and most obvious direct cost of losing a customer is the money you do not make or lost profits. For example, your business may invest, on average, $100.00 per customer to attract a new client who then spends $150.00 so that you have a return of $50.00 for every


$100.00 your business invests. By losing 1 customer, you lose $50.00 of profit you could have earned. Ouch!


If this scenario repeats itself often enough and your business attracts fewer and fewer customers, you may find that your business now more – say


$110.00 – to attract each new client, reducing your profit to $40.00 per new customer. Over the long term, your business loses the predictable income stream that it needs to operate smoothly and profitably. Every lost client represents money being thrown out the window.


The second direct cost of losing a customer is the loss of the investment you made in attracting the client. You invested $100.00 but got zero return on that investment. Your business can survive the loss of one individual. Start counting the number of potential customers who walk away and the damage it does to your business should become obvious. Ouch!


The hidden costs of losing a single customer may be even more damaging to your business than the loss of income that the individual generates for the services you provide.


Indirect Costs


Missing out on income is bad enough but the other hidden costs of losing a customer may be worse.


Remember this statistic from the first article? An unhappy customer will tell 8 to 16 people about a negative experience and those people will tell other people so that on average, 56 people will learn about a bad experience with your business. That is a lot of damaging publicity! Training your staff to avoid and manage negative customer experiences is vital to the success of your business. Otherwise, you may have 56 people posting and Tweeting negative comments about your company. Ouch!


A dissatisfied customer certainly will not refer additional business to you. Think about the businesses that you are happy to tell family and friends about – your favorite restaurant, a clothing store with knowledgeable sales staff, your family doctor. Your recommendation carries a lot of influence with it, far more than even the most effective advertising campaign. Conversely, if you tell me that Dr. NoGood did a terrible job filling your tooth, then I certainly will not use his services the next time I am in Costa Rica and want to have dental work. Not only will I look for another dentist, I will tell other people not to go to Dr. NoGood. Ouch!


One happy customer may reward your good work by referring additional clients. If you spend $100.00 to attract one customer and that customer refers five additional clients, you have reaped a tremendous return on your initial investment. If the average customer spends $150.00 with your business, these six clients will spend $900.00. That one happy customer generated $800.00 in profit for you. Now that is a scenario you want to repeat every day.

A Downward Spiral

There are other intangible costs associated with a high turnover of clients. Think about the time that you and your staff spend teaching your customers about your company and the services it offers. The medical tourism sector is a personal, individualized business that involves a great deal of contact with your customers. If you retain that customer, then the next transaction should go smoothly, building the client’s confidence and loyalty to your business. Trust and confidence are essential elements to loyalty making the client more likely to use your services and encourage others to do so as well.


As mentioned before, the more customers you lose, the more money you have to spend attracting new customers. Money is then diverted from other services such as investing in your employees and growing your business. If you are focused on replacing customers, you are not thinking about making your environment a better place to work. This downward spiral directly impacts your employees.

Impact on Employees

The more customers you lose, the harder it is on your employees who have to devote more time and patience to bringing in and working with new customers. There is a direct correlation between customers leaving and employees walking away. It is demoralizing to work for a business that is struggling or where management does not invest in their employees through education and training as well as pleasant surroundings that are conducive to hard work.


Creating a great place to work is reflected in the efforts employees make to deliver VIP customer service to your potential and existing clients. The economic recession has people staying in their jobs longer, maybe longer than they would like. Once better opportunities come along, employees will jump ship taking knowledge and competitive secrets with them. Ouch!


Attracting and training new employees takes time and money, diverting your attention from clients and managing your business. Ouch!


The direct and indirect costs of losing customers hurt your business and prevent it from growing. The loss of income and low return on investment have a direct negative impact on the bottom line. Unhappy customers broadcast negative statements about your services to dozens of other people and fail to refer additional business to you. Employees get discouraged and they leave, requiring resources to hire and train them. This is a pattern that must be broken if your business is to survive and thrive.


Has all of this pain convinced you that you need to take steps to reduce the number of customers who walk away?


In the next article, we will offer solutions and suggestions for attracting and retaining more clients for your business. Look for our next email and in the meantime, visit our web site to register for courses to improve your ability to deliver VIP customer service.


Want to stop customers from going to your competition? Keep more customers through improved customer service by signing up today for our online courses, Telephone Skills for Medical Tourism Professionals, Email Etiquette – Netiquette, and Working with Upset Customers.

Your investment will pay for itself when your business keeps one more customer!

Copyright © 2015 by Medical Tourism Training, Inc. Newport, Rhode Island, USA. Proprietary Information: All rights reserved. No part of thisdocument may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, or by information storage and retrieval system, without written permission from Medical Tourism Training.

The following two tabs change content below.
Elizabeth Ziemba

Elizabeth Ziemba

President at Medical Tourism Training
With a diverse background in public health, law and business, Elizabeth brings a unique set of skills and experience to Medical Tourism Training with services including assessment tools, online and onsite training, workshops, and consulting services for governments, providers, facilitators, associations and others involved in medical travel.