Vodafone Australia has just announced that they have lost 375,000 customers in the first 6 months of 2011. The cause, not a surprise, is poor network service and lousy customer service.

How much will this cost them? Well, they won’t divulge the profit per customer but they have stated that each customer spends, on average, $52.89 per month. So on revenue terms their loss is:

1 Year: $237,915,000  (that’s nearly $238 million)

2 Years $475,830,000 ($476 million)

3 Years $713,475,000 ($714 million)

That’s right, over the next 3 years those lost customers would have been worth $714 million in revenue. If you add in the 200,000 + customers who apparently also deserted Vodafone last year, then over a 3 year period they will have lost over $1 billion in revenue.

Most lost customers were pre-paid, who can easily switch providers. As more post-paid customers come off contract the customer losses are expected to increase even more.

And how much have they spent on network upgrades to fix the problems? Around $162 million. From my experience, nothing has been spent on improving customer service (as a phone company it is impossible to contact them by phone – seems a rather odd situation).

If this doesn’t go down in the record books as one of the most disastrous company screw-ups in Australia’s history then there is something even worse that I haven’t heard of lately.

Has anyone been sacked because of this? Probably not.

Are their competitors laughing all the way to the bank? YES

I wonder how concerned Vodafone really are about the massive costs of these lost customers?

Have you calculated the cost of your lost customers? If not then get someone in your company to work it out NOW. Chances are you’ll be surprised at the cost of your lost customers. The good thing is that reactivating lost customers and preventing further losses is not always as difficult or as costly as some people assume.

If you’d like any assistance or advice on reactivating lost customers and preventing further customer losses, call Martin Dabb ph; 0458 290 100 (Perth) or Email Me