Reference no: EM131732466

The Value of Call Monitoring: Comcast's call center had a problem with unresolved incidents. Customers who called in for technical help often had to make follow-up calls because the first recommended solution did not work. Since the call center staff were expected to handle an average of 10 calls per hour, Comcast suspected that calls were being terminated before the complaint had been resolved. As a possible solution, they hired supervisors to randomly listen into calls so as to better monitor inappropriate call terminations at a cost of $5,000 per month. This cut down the need for follow-up calls and, more importantly, increased customer retention. The number of customers who called in a complaint and would terminate services within three months was cut from 150 to 100.

Question: How large must the present value of a retained customer's contribution margin be for additional monitoring to be profitable?