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The Hidden Cost of Non-Scalable Software: You May Lose Up To 25% of Your Revenue

Sep 25, 2024
5 minutes to read

Talkify Agent

A study conducted by McKinsey found that a lack of scalable software solutions could cost businesses anywhere between 8% and 25% in revenue losses.

Simply put: if your software doesn’t grow with you, your company will suffer long-term consequences – such as revenue loss, higher workload, wasted time, lost motivation, and more. In fact, just a 5% increase in customer churn can lower your profitability by up to 50%.

Let us guide you through what you need to avoid and how to find software that adapts to your business needs without losing revenue.

The $10,000+ Cost Of Switching Software

Switching to different software costs more than the initial price of the new solution. Often, there are hidden charges that many companies fail to consider.

According to internal data at Talkify, businesses can lose 10,000 dollars of revenue on average in less than a business day(!), simply due to the downtime caused by the switch. And, depending on the software and the type of your business, it can impact your work for weeks.

Many companies are barely prepared to purchase new software: according to Finances Online, only 36% of traditional companies allocate money for software. And to top it off, research shows that in 2023, an average company uses as many as 130 SaaS solutions – and they’re often interconnected!

With such a wide software ecosystem, switching from one solution to another can really add up and contribute significantly to your overall spending.

The Undeniable: Direct Costs of Switching Software

A direct switch to a new B2B software platform can immediately cost companies between $500 to $10,000 on average, depending on the software type and business size.

This sum accounts for immediate expenses such as the monthly or yearly membership fee, license acquisitions, and additional feature costs.

Moreover, infrastructure-related expenses like buying new hardware or adding phone numbers can inflate this figure by another 10-20%

The Power of Familiarity: Boosting Productivity and Retention

Consider just how much more productive your employees can be if they are truly familiar with a solution.
They don’t need to spend time figuring out new features, so they can focus on what truly matters for your bottom line.
More productive workers provide high-quality, timely service, which enhances your customer experience and satisfaction.
Research has shown that just a 5% increase in customer retention can boost your profits by up to 125%.
This metric becomes even more significant when you consider that acquiring a new customer costs up to five times more than retaining an existing one.
It’s evidently more feasible to keep your satisfied customers on board than to persuade prospects to invest their trust in you.