How To Calculate Customer Support Margin in Freshbooks | Arithmix

As a business owner, it's important to understand the financial health of your company. One way to do this is by calculating your customer support margin. This metric helps you determine the profitability of your customer support operations. In this article, we'll explain what customer support margin is, when it's valuable to calculate it, and how to do so.

What Is Customer Support Margin?

Customer support margin is the difference between the revenue generated by your customer support team and the costs associated with providing that support. This includes salaries, benefits, software, and any other expenses related to customer support. Essentially, it's the profit you make from your customer support operations.

Calculating customer support margin is important because it helps you understand the financial impact of your customer support team. If your customer support margin is high, it means that your team is generating a lot of revenue while keeping costs low. On the other hand, if your customer support margin is low, it may be an indication that you need to make changes to your operations to improve profitability.

When Is It Valuable To Calculate Customer Support Margin?

Calculating customer support margin is valuable for businesses of all sizes, but it's especially important for those with dedicated customer support teams. If you have a team of support agents, you're likely investing a significant amount of money into their salaries, benefits, and training. By calculating your customer support margin, you can ensure that this investment is paying off and that your team is generating revenue for your business.

Additionally, calculating customer support margin can help you identify areas for improvement in your customer support operations. For example, if your margin is low, it may be an indication that you need to streamline your processes or invest in better software to reduce costs. By making these changes, you can improve profitability and ensure that your customer support team is contributing to your bottom line.

How To Calculate Customer Support Margin

Calculating customer support margin is a relatively simple process. To do so, you'll need to gather data on your revenue and expenses related to customer support. This includes:

• Total revenue generated by your customer support team
• Total expenses related to customer support, including salaries, benefits, software, and any other costs

Once you have this data, you can calculate your customer support margin using the following formula:

Customer Support Margin = (Total Revenue - Total Expenses) / Total Revenue

For example, if your customer support team generated $100,000 in revenue and had $50,000 in expenses, your customer support margin would be:

($100,000 - $50,000) / $100,000 = 0.5 or 50%

This means that for every dollar you invested in customer support, you generated $1.50 in revenue.

By calculating your customer support margin on a regular basis, you can ensure that your team is contributing to your bottom line and make any necessary changes to improve profitability.

How Do You Calculate Customer Support Margin in Freshbooks

Freshbooks itself isn’t naturally geared towards letting you calculate complex metrics like Customer Support Margin. As an alternative, teams typically use products like Arithmix to import data from Freshbooks and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Freshbooks, combine it with data from other systems, and create calculations like Customer Support Margin.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Customer Support Margin in Arithmix

Calculating metrics like Customer Support Margin is simple in Arithmix. Once you've created your free account, you’ll be able to import your Freshbooks data, and use it to create natural language formulas for metrics like Customer Support Margin.

Arithmix is designed to give you the power to build any calculations you want on top of your Freshbooks data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.