Valuing Your Customers’ Value: Preventing Customer ChurnReading time: 2 minutes
No matter what industry you’re in, losing customers is bad for business. Each year, customer churn costs U.S. companies many billions of dollars in lost revenue. Yet efforts to retain customers are both cheaper than acquiring new ones and can make a significant impact on profits.
Increasing customer retention by just 5% has been shown to increase profits 25-95%.
So it wouldn’t be a stretch to suggest that your entire business model relies on the revenue generated from customers who remain loyal. Preventing customer churn, then, is the process of making your customers even more valuable through the act of valuing them.
Yes, customer churn’s impact dilutes the hard work and expense you put into attracting those customers to begin with, and it places stress on you to find new customers. But think of the outgoing customer, who now has to find a new service partner. It’s an unpleasant situation all around.
Besides deploying a smart marketing strategy to keep customers in your camp, what else can you do to gain insights on their behavior and likelihood to leave?
Using Data Analysis to Overturn Churn
Leveraging data can tell you where customer churn is really hurting your business. Data tells you when churn occurs and which types of customers typically leave. Depending on your business model, data also helps you see where you should make improvements to meet more customers’ needs. That’s just on the surface, though—what’s also known as a “descriptive” level of analysis, which measures past data and shows your current churn rate.
Moving deeper into predictive analytics around your customer churn, you can forecast how many customers will leave. Then, measure which areas of your business will see the highest rates of churn. From there, become proactive about retaining them, from establishing customer rewards programs to designing personalized outreach initiatives.
How the Rapid Insight Platform Can Help
Watch a recent webinar exploring a telecommunications customer churn use case. With our award-winning data-prep tool, Construct, we show you a quick, easy, code-free way to create a clean data workflow and run on-demand analyses.
Then we demonstrate how to deepen those insights, deploying our predictive analytics program, Predict, and helping you anticipate the likelihood of customer churn in the future.
It’s time to take your business expertise and customer knowledge and start to apply data analytics to minimize—and predict—customer churn. It all begins by valuing your customers’ value. Let our platform help you take it from there.