How do you calculate Cost to Retain/Cost to Support for your Customers?

WillowMoellering Member, CS Leader Posts: 21 Thought Leader
First Anniversary Photogenic First Comment
edited July 2020 in Metrics & Analytics

I would love to be able to calculate Cost to Retain  compare to CAC and calculate margin.

In the past I have used the more traditional hours from support, CS, customer marketing, training and renewals * average cost per hour (team expense) = total cost.  While this works, there is either a lot of overhead to track or there is so much generalization the metric isn't super accurate. 



  • David Ellin
    David Ellin Member Posts: 170 Expert
    Name Dropper Photogenic First Anniversary First Comment
    edited July 2020

    @Willow Moellering, I think you have a great start but I agree that it's likely not accurate. That would depend on how good your time tracking is. One component I'd add to Cost to Retain would be any concessions provided at renewal to retain the customer.

  • Jordan Silverman
    Jordan Silverman Member, CS Leader Posts: 109 Expert
    First Comment 5 Likes Photogenic First Anniversary
    edited February 2021
    @Willow Moellering resurfacing this old discussion since I am currently working on this.

    What I have been trying to do is figure out cost to service per customer.

    My thought process was:
    - Add up all OTE for employees per segment (SMB vs mid-market vs Enterprise)
    - Add up cost per month of tools for employees in that segment (Totango, Zoom, Calendly, etc.)
    - Add up stripe and average server charges per customer

    - Divide this by the total number of customers in each segment to get an average $ cost per customer

    Would this seem accurate? Think I should add anything?
    Jordan Silverman
    (914) 844-5775