Calculating the cost of lost customer loyalty

This week Woolworths have been fined by ACMA for spam emails.

As we all dive in and debate the do’s and don’ts, what’s right, what’s wrong and start to review the systems and processes to avoid this, one of the many lessons here for me is realising the truth of the cost of lost members.

A member who unsubscribes is a lost member.

Although they may still be engaging in the program, the program has lost the communication channel with them (assuming email is the only channel of contact).

So going one step higher in this debate, I suggest every program calculates the cost of a lost members.

Why? If we focus on the cost of lost members, by calculating the value of a lost member (I mean one who has unsubscribed), then we will realise the importance of respecting the member at the outset.

I am not saying zero unsubscribes is the answer, I am saying calculate the cost of lost members and then invest in minimising the loss.

I have written a more detailed blog on calculating the cost of lost members, which is available here