{"id":15911,"date":"2017-10-17T14:13:00","date_gmt":"2017-10-17T21:13:00","guid":{"rendered":"https:\/\/devwww.3cloudsolutions.com\/post\/maximize-your-customer-retention-by-predicting-customer-churn-2\/"},"modified":"2024-04-08T14:08:59","modified_gmt":"2024-04-08T21:08:59","slug":"maximize-your-customer-retention-by-predicting-customer-churn","status":"publish","type":"post","link":"https:\/\/3cloudsolutions.com\/resources\/maximize-your-customer-retention-by-predicting-customer-churn\/","title":{"rendered":"Maximize Your Customer Retention by Predicting Customer Churn"},"content":{"rendered":"<h2 style=\"text-align: center;\">&#8220;Increasing customer retention rates by 5% increases profits by 25% to 95%.&#8221; <span style=\"font-size: 16px;\">&#8211; <a href=\"http:\/\/hbswk.hbs.edu\/archive\/1590.html\" target=\"_blank\" rel=\"noopener\">Harvard Business Review<\/a><sup><span style=\"font-size: 11px;\">[1]<\/span><\/sup><\/span><\/h2>\n<p>Reading this statistic in Frederick F. Reichheld and Phil Schefter&#8217;s &#8220;<a href=\"http:\/\/hbswk.hbs.edu\/archive\/1590.html\">The Economics of E-Loyalty<\/a>&#8221; article from the Harvard Business Review, I was surprised that such a minor tweak in retention could have such a major impact on profits.\u00a0The economic experts went on to explain that loyal customers buy more and refer new customers, solidifying the importance of long-term customer relationships.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" style=\"margin-right: auto; margin-left: auto; display: block;\" src=\"https:\/\/3cloudsolutions.com\/wp-content\/uploads\/2022\/11\/customer-churn-1.png\" alt=\"customer churn\" width=\"805\" height=\"509\" \/><\/p>\n<p><!--more--><\/p>\n<p>While we know winning a new customer&#8217;s business is difficult and costly, keeping long-established clients has its own set of challenges. Predicting and understanding customer churn take some of the guesswork out of customer retention. By studying behaviors of clients who have churned in the past, and looking at current customers that are behaving similarly, we can take action to positively affect their retention. This can be achieved by establishing a targeted plan that nurtures loyalty in every one of your customers.<\/p>\n<h3>Key Benefits, Facts, &amp; Insights<\/h3>\n<ul>\n<li><strong>Boost Profits:<\/strong>\u00a0Selling to existing customers is easier and more cost effective rather than selling to new ones.<\/li>\n<li><strong>Retain More Customers:<\/strong>\u00a0Proactively launch campaigns and strategies to abate customer attrition.<\/li>\n<li><strong>Win Back Business:<\/strong> Identify the root causes as to why customers leave and establish re-acquisition\u00a0strategies.<\/li>\n<li><strong style=\"background-color: transparent;\">Avert Loss:\u00a0<\/strong><span style=\"background-color: transparent;\">Customer loss is substantial, long-reaching, and can impact everything from revenue to opportunity for competition.<\/span><\/li>\n<\/ul>\n<h2>Where to Begin&#8230;<\/h2>\n<p>Whether your customers are people or businesses, and no matter if you&#8217;re selling products or services, the problem is still the same: Keeping current customers while continuing to grow with new ones. This means understanding\u00a0<em>who<\/em> is no longer a buyer and <em>why<\/em>\u00a0they&#8217;ve chosen to leave. Once you have the answers, you can work on your retention practices to prevent similar losses in the future.<\/p>\n<p>Knowing who is no longer purchasing from you is easy. The mystery lies in knowing which active clients you may lose. Predicting which of current customers are exhibiting behavior like your &#8220;previously-churned&#8221; customers is the best way to tackle the problem. However, doing this by hand would prove to be highly complex. Using the power of Machine Learning and Microsoft Azure, your historical customer data will be put to work to accurately predict future churn.<\/p>\n<p>We&#8217;re using our <a href=\"\/customer-churn-solution-offering\" target=\"_blank\" rel=\"noopener\">Customer Churn Solution<\/a> to help organizations utilize their historical customer data to target at-risk customers and find opportunities to bring back those who&#8217;ve left.<\/p>\n<table style=\"width: 702.8px; margin-right: auto; margin-left: auto;\">\n<tbody>\n<tr>\n<td style=\"width: 695.8px;\"><img decoding=\"async\" style=\"width: 640px; margin-right: auto; margin-left: auto; display: block;\" title=\"Churn_SolutionPath_Horiz.png\" src=\"https:\/\/3cloudsolutions.com\/wp-content\/uploads\/2022\/11\/Churn_SolutionPath_Horiz.png\" alt=\" Customer Churn Solution\" width=\"640\" \/><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 695.8px;\">\n<ul>\n<li>The first step is to define what &#8220;churn&#8221; actually means for your organization. Often, &#8220;churn&#8221; is defined by a period of inactivity. Additionally, defining your success criteria is very important to this step.<\/li>\n<li>Once we help you gather sufficient historical data to make a satisfactory prediction, we can then begin creating the predictive model. This also includes model validation and tuning to get the most accurate churn prediction from your data.<\/li>\n<li>As a last step, we will consult with you around implementing this churn prediction into your organization, both from a data architecture front and reporting\/training standpoints, too.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2>Putting the Predictions to Use<\/h2>\n<p>Our goal is to give your company a targeted set of actions to improve customer retention. Once an accurate model has been trained, all of your past and present customers will be run through the predictive model. This could give one of three results. <em>See the table below:<\/em><\/p>\n<p><img decoding=\"async\" style=\"width: 640px; margin-right: auto; margin-left: auto; display: block;\" src=\"https:\/\/3cloudsolutions.com\/wp-content\/uploads\/2022\/11\/Churn_Table.png\" alt=\"Churn_Table\" width=\"640\" \/>If the prediction matches the actual status of the customer, then there is <span style=\"color: #008000;\">no action<\/span> necessary. However, if an active customer is predicted to be a churned customer, this will imply that this customer is <span style=\"color: #ff0000;\">at-risk<\/span> of churning. Alternatively, if a customer is currently inactive (meaning that they previously churned), but the prediction is that they are an active customer, this may indicate that they are a good <span style=\"color: #9b61bc;\">target<\/span> with which to attempt to reinstate business.<\/p>\n<p><img decoding=\"async\" style=\"display: block; margin-left: auto; margin-right: auto; width: 390px;\" src=\"https:\/\/3cloudsolutions.com\/wp-content\/uploads\/2022\/11\/churn.png\" alt=\"churn.png\" width=\"390\" \/><\/p>\n<p>BlueGranite&#8217;s Customer Churn prediction also enhances reporting by providing account managers with a list of clients to target with retention efforts, and identifying the best former prospects to try and win back. These crucial insights maximize customer preservation and accurately pinpoint marketing efforts.<\/p>\n<h2>Want to Learn More?<\/h2>\n<p>Interested in learning more about customer churn, but not sure where to go? Here are a few more resources to point you in the right direction:<\/p>\n<ul>\n<li>Check out BlueGranite&#8217;s\u00a0<a href=\"\/customer-churn-solution-offering\" target=\"_blank\" rel=\"noopener\">Customer Churn Solution Offering<\/a>\u00a0for more details on how we can help you implement this type of prediction tool.<\/li>\n<li>Register for our October 26th <a href=\"\/predicting-customer-churn-webinar\" target=\"_blank\" rel=\"noopener\">Customer Churn Webinar<\/a>.<\/li>\n<li><a href=\"\/contact-us\" target=\"_blank\" rel=\"noopener\">Contact us<\/a>\u00a0to learn how BlueGranite experts can help to design a solution to meet your unique needs.<\/li>\n<\/ul>\n<h6><strong>References: <\/strong><br \/>\n<strong>[1]\u00a0Harvard Business Review &#8211; <a href=\"https:\/\/hbr.org\/2014\/10\/the-value-of-keeping-the-right-customers\">https:\/\/hbr.org\/2014\/10\/the-value-of-keeping-the-right-customers<\/a> <\/strong><\/h6>\n","protected":false},"excerpt":{"rendered":"<p>Understanding why customers leave is often a difficult task. With BlueGranite\\&#8217;s Customer Churn solution, we can help you maximize your customer retention.<\/p>\n","protected":false},"author":21,"featured_media":14555,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[260],"tags":[308,319,321],"class_list":["post-15911","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-data-ai","tag-financial-services","tag-machine-learning-ai","tag-retail-consumer-goods","topics-blog","industries-financial-services","industries-retail"],"acf":[],"_links":{"self":[{"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/posts\/15911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/comments?post=15911"}],"version-history":[{"count":0,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/posts\/15911\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/media\/14555"}],"wp:attachment":[{"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/media?parent=15911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/categories?post=15911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/3cloudsolutions.com\/wp-json\/wp\/v2\/tags?post=15911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}