Having the ability to take a look into a crystal ball and see the future is probably something that most business owners would rank high on their wish-list. It would enable them to – among other things – see which customers are likely to leave them, and which are the most loyal ones. A rule of thumb says that it costs five times as much to get a new customer as it does to keep the current customers.
New technology such as Machine Learning based on Microsoft and open source technologies, make it possible to identify potential "churners". The technology, which is becoming more and more accessible, can quickly and with great statistical certainty tell you which parts of your customer group are in the risk for leaving you - it gives you your very own crystal ball.
And how can you use that information? The insight into your customers’ behavior enables you to act before your customers even know that they want to leave you. It creates great value for your business to have this knowledge as it allows for targeted action and picking some of the low-hanging fruits. You can act proactively and give the customer the right offer based on their specific behavior, so the customer is more likely to stay.
”The model now tells us with great accuracy, which customers are at risk of churning, and which ones it considers safe”
Carsten Dreyer Christensen, Head of Business Analysis at Aarstiderne - read the case here.
Understand your customer base even better
With a customer churn and retention framework you will understand your customer base even better. You will be given the opportunity to identify customers in the risk group to leave you, while also understanding what characteristics your most loyal customers have. That information you can use to target your marketing efforts. You can use the information to identify those who look like them and systematically try to prevent them from ending up in the risk group. Ultimately, this knowledge will make your business more efficient and allow you to reduce costs and increase earnings.
By further analyzing customers in different risk groups you can start developing a better understanding of the factors that drive their decisions to leave, and use that knowledge to invest in efforts to change their minds. Our expertise, data insight and broad experience combined with your own in-depth understanding of business processes is the key to unlocking actionable insights and putting them to good use.
How can we predict who will leave you?
We predict it based on data from your business. All that data is put into our customer churn and retention framework, which makes it possible to tell you which customers are most likely to leave you based on your own data. The result can be looked at in two ways. From a statistical perspective – so how good is the model at predicting who wants to leave the company – or from a business perspective – that is how much money can be saved by spotting potential churners and persuading them to stay in the business.
Learn more about customer churn and retention.