Customer Success
Your cost of non-quality
What discounts, shrinking scope, avoidable losses and escalations cost you every year.
The problem
The cost of non-quality is scattered. A discount given to save a signature sits in revenue, a downsell in NRR, an escalation in team time. No line brings them together, and nobody has ever received the whole invoice.
Without a total, each item justifies itself: the discount was necessary, the downsell unavoidable, the escalation a one-off. Added up, they weigh a share of ARR that leadership would not discuss the same way.
Your cost of non-quality
How to read the result
Input
- ARR up for renewal over twelve months
- Average discount granted at renewal, as a percentage of ARR
- Downsell: fewer seats, modules or scope, as a percentage of ARR
- Churn judged avoidable, as a percentage of ARR
- Team days spent on escalations over the year, and the cost of one day
How to read the result
- The total, and its share of ARR up for renewal, give the order of magnitude to set against the budget of preventive work
- The heaviest line points to where the cause most likely sits: at signature, at renewal, or in how the account is followed
- Escalation days appear in no revenue metric: this is the line dashboards do not show
- What gets settled next: what to prevent first, and what it is acceptable to keep paying for
Limits
- This is an estimate built on the assumptions entered. The plus or minus 20% range is an order of magnitude, not a confidence interval.
- One loss can land in two lines, for instance a discount followed by a downsell on the same contract. The calculation does not deduplicate.
- The cost of a team day is a starting value. It includes neither opportunity cost nor the effect on team morale.
- The share of churn judged avoidable is a judgment call. It depends on what could have been done earlier, and only an account-by-account review confirms it.
Useful for opening a budget discussion with a number to challenge. It is not an accounting measure. An unreadable entry leaves the last valid value in place with a message, and entries stay in the browser.
In the glossary
A first thirty-minute conversation
The tool gives the order of magnitude. The decision that follows can be discussed in thirty minutes.