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Business Value

Business Value

Every business needs to evaluate the business value of a new service that costs money, even if the cost is relatively low. The business value of know’N’act can be broken out into two broad components.

  1. Can know’N’act reduce your customer churn and what is that worth when you consider what could have been the lifetime value of that customer for you? Our ROI calculator provides a simple mechanism to determine the value of customers lost in this manner so that the ROI on using know’N’act is easy to evaluate.
  2. Can know’N’act drive up revenue and if so, by how much? With the couponing, sweepstakes and gifting features of know’N’act, driving up revenue is a matter of using the right tools appropriately. If you can generate coupons or use the “Send a Gift” features that:
    • Bring back customers faster or
    • Bring in new customers that were not regulars before or
    • Just get customers to spend more with you at every visit by cross-selling or upselling

    Then you have the ability to drive up revenue in a measurable way.

Net – know’N’act drives real business impact via two equally important mechanisms. Reducing churn and bad customer perception (which spills over into social media) is a great defensive measure. Using the couponing and other gamification options can help drive greater revenue through repeat traffic, new traffic and cross-sell or upsell opportunities.

Try our easy to use ROI calculator to evaluate the impact for your business.

Average # of customers/month
Average customer check
Expected customer visits per year
Customer value over 4 years

(Average customer check) X (Expected customer visits per year) X 4

Cost of know’N’act subscription/month
Address the negatives
% of customers with a bad experience %
# of customers lost as a result

(% of customers with a bad experience) X

(Average # of customers/month)

Value of customers lost per month

(# of customers lost as a result) X

(Customer value over 4 years)

% out of above we can avoid losing
with intervention

Out of the % unhappy above ,

what % can you recover with timely action

%
Value of customers ‘recovered’

[(% of customers we can avoid losing with intervention) X

(Average # of customers/month)] X (Customer value over 4 years)

[(Value of customers ‘recovered’) /(Cost of know’N’act subscription/month)] X 100

ROI = %

Upsell and cross-sell opportunities
% of customers who receive coupons %
% of customers who use time-bound coupons %
Cost of each coupon
Uplift in revenue per month per coupon redeemed

[(Expected customer visits per year) X

(Coupon efficacy)] / 12 X

[(Average customer check) –
(Cost of each coupon)

Revenue increase per month across all coupons

(Uplift in revenue per month
per coupon redeemed) X

(% of customers who use time-bound coupons) X

(Average # of customers/month)

[(Revenue increase per month across all coupons) / (Cost of know’N’act subscription/month)] X 100

ROI = %

(Value of customers ‘recovered’) +(Revenue increase per month across all coupons)

Total /month impact :

(Total $/month impact) /(Cost of know’N’act subscription/month)

Total ROI : %

Copyright 2015 know’N’act

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