Customer Churn Analysis: The Invisible Force That Every Organization Needs to Have in Its Arsenal

Customer Churn Analysis

Customers are the backbone of any business, whether big or small, technical or general, company or a sole proprietorship. All depend on the interests of their invaluable customers. The primacy of the customers has taken businesses from “Scratch to Gold,” helping them build a reputation in the market for or to even maintain an image for an already established giant. Firms have to make sure that their customers are happy and satisfied or else they will reach their lowest point. For this very reason, various companies and firms have indulged in a practice to ensure their customers don’t buzz away from their business and their competitors don’t take advantage of their nonchalance. This Practice is called Customer Turn or, a more popular term in the business world, Customer Churn. Customers being withered away to competitors are a common sight and therefore companies around the globe differentiate between two important aspects of Customer Churn, “Voluntary Churn” and “Involuntary Churn.” The former relates to the loss of an existing customer due to the decision of the customer himself, whereas the latter occurs because of circumstances not in the hands of the company or the firm or the service provider. Healthy businesses keep a track record of their customers, and their analysts constantly search their databases for any loopholes giving birth to unfavorable circumstances which lead to Customer Churn. This process is called Customer Churn Analysis.

Organizations have separate departments and wings to take care of the needs and services for this very purpose. Banks, telephone and wireless service companies, Internet Service Providers, cable TV companies, alarm monitoring services, etc. are prime examples of businesses which use this effective function of analyzing Customer Churnin the marketing world. By analyzing the situation of the customer base, the experts and analyst make a typical distinction between ‘Gross’ and ‘Net Churn’ or Turn. Gross Churn is the loss of existing customers and their related or associated recurring revenue for goods or services during a period in the financial year. Net Churn on the other hand is Gross Churn plus the addition of similar customers at the original location within the same time period of the financial year. With the cost of retaining an existing customer being far less than gaining a new one and then maintaining it, a wise company is one which works on maintaining customer base rather than building a new one solely. Business acumen becomes a key factor in deciding whether a customer stays or steers away into opposition territory. The need of think tanks and separate departments mentioned earlier are necessary and for that very reason.CustomerRetention Strategies are used by the businesses to make sure they customers the main focus. Financial institutions, for example, often track and measure Customer Churn using a weighted calculation called “Recurring Monthly Revenue” (RMR).

Many business intelligence software programs having the capacity to search customer databases and factors associated for customer churn such as inefficient post-purchase service or non-fulfillment of contract are in use today as part of the customer retention strategies applied by various organizations. For the reduction in the number of customers due to variable factors, organizations have developed various standards for the safeguard of their respective customers. The International Customer Service Institute has developed the International Customer Service Standard to strategically align organizations so they can focus on delivering quality services that the customers demand and hence move forward in the right direction to mitigate the loss in business due to involuntary churn.Not every organization tends to overindulge its customers. In fact, experts recommend removing those customers that are bringing no good to the firm and this is a very integral part of Customer Churn Management. Customers being a lifeline of the business have to be taken very seriously and Customer Churn should be prevented by every business whether big or small to ensure success.

Similar Articles

6 Most Common Customer Service Myths Debunked

In the customer service sector, it is sometimes extremely hard to distinguish between facts and myths. This is because, the industry in the present times is changing so fast that several players in the marketplace sometimes struggles to keep up, which makes it a fertile ground for spreading and nurturing false notions, fads and toxic myths in businesses.

Business Cards 101 - Things You Need to Know

Sending thank-you notes to your customers or clients is a great way to show that they matter to you and to your business, and a handwritten note sends an even stronger message and can further strengthen your relationship

Proven Ways Successful Startups Are Handling Customer Service In 2019

Even without dedicated customer support staffs and a big budget, bootstrapped startups can nonetheless provide and execute the kind of CX (Customer Experience) that most big establishments dream of.

5 Benefits of BPO Services with Multi-Channel Customer Support

Customers are like babies. They want all the attention of the business provider, whenever they feel like interacting. Moreover, with the on-going trend of personalization, customers want to connect with the business anytime at their convenience. BPO services work best for this purpose and satisfy customers’ demands.

Know the Reasons Why You Should Hire a Customs Clearance Company

Customs clearance is a process which involves complying with the import and export regulations of a country. However, handling the customs process on your own is not an easy task as it is a complex procedure. This is where customs clearance company steps in. It will make sure all the goods reach the destination in a safe and timely manner.

business process outsourcing

It has always been said and believed that delivering the best customer service is the key to attain success. Meeting your customers’ expectations serves as the best tool to not only win their trust and confidence but also create a niche over your competitors in the market.

speech analytics technology

Building a strong relationship with the customers is a tough task as there is little or no information available about the customers in a real-time scenario. This is where speech analytics software can play a major role.

Customer Relationship Management: Importance to a Business

A business who can manage its customer relationship well has more chances of becoming successful. A customer relationship management (CRM) is the most efficient and strongest approach to maintain and create a relationship with your customer. 

speech analytics for customer experience

The businesses, these days, are continually focusing on improving their Customer Relationship Management (CRM) strategies. One of those important steps that are being taken by almost every business firm is availing the services offered by various contact centers in the market.