The Proper Way to Retain Churn Customers

M. Ahmed Tayib
25 March 2021
4 Minutes Read

Data Science to the Rescue

Retaining churn customers are one of the hardest objectives to achieve. However hard it is, it is not impossible. There are many factors that contribute to this frustration:

  • How to know which customers have churned or will churn in the future?
  • How to approach these customers, which what offers and promotions?
  • What will trigger these customers to make them return?
  • Why they have churned in the first place?

Yeah, I can go on for more and it will only get uglier. All these factors can be explained using data and that's what I am here to do.

If you want to know more about why companies struggle to retain churn customers in more detail please read the below article; Why do Companies Fail to Retain Churn Customers?

Forget Everything You Know

Let's start with clean sleet. We will try to answer every question mentioned above using data science. For this, we will need a few things. First, you need CRM data, meaning Customer Data and Sales Data. Second, you need software called Enhencer. Enhencer is an online platform that helps to conduct churn analysis using AI-based algorithms. Don't worry, you won't be needing any coding or other requirements, it's very user-friendly and intuitive. Also, you don't have to purchase, just sign up for free, it will do the job.

First, we need to upload the data to the platform using the connector that suits us the most.

Purchase Propensity

Let’s upload the data using CSV, and when uploading is finished, let’s click the Explore button. You can choose any other options that suit you best.

Don’t get intimidated by Churn Analysis; here is why: once you upload the data Enhencer does the rest on its own. Enhencer:

  • Does Feature Engineering automatically on the data
  • Trains multiple Machine Learning Models on the processed data and chooses the model with the best performances.
  • Trains multiple Machine Learning Models on the processed data and chooses the model with the best performances.

After processing the data Enhencer will produce a dashboard like this:

Purchase Propensity

Answers to the Questions

Let's come to the first question; How to know which customers have churned? The data suggests that out of 2474 customers 27% have churned in the last month and the rate changes as we go back more in the past. You can download the list of the customers directly. But that's not why we are here, right?

“The best way to reduce churn rate is to prevent churn before it happens”

Here is an article explaining in detail why churn prediction is important:

If you want to know more about why companies struggle to retain churn customers in more detail please read the below article; Why is Churn Prediction important?

Churn Prediction Simplified

Enhencer automatically conducts the churn prediction after uploading the data. Enhencer does this by analyzing the past behavior of the customers and segments them into different segments. For instance, the customers in the segment have the highest likelihood to churn of 77.8%, meaning they are the riskiest customers.

You can select the top 5 segments and they will hold the customers who are highly likely to churn. It is a no-brainer that if you want to reach out to the customers to prevent churn these are the most relevant and precise target audience for such a case. Just download the customer list from these selected segments and reach out to these customers for the most impact.

So now you know which customers have churned and which customers will churn in the future. But another question remains; Why they have churned or will churn in the first place?

Well, Enhencer has this covered too. All these segments are constructed by analyzing the customers' past behavior. Segment 1 consists of the highest likely churn customers and when you click on the insights, Enhencer will provide the behavior of the customers from segment 1.

Purchase Propensity

These 19 customers who are very, very likely to churn have a few common behaviors. In the past, these 19 customers bought products from more than one product category. They have been inactive for at least 55 days. They gave a product rating of below 1 and are more than 27 years old.

Now you know the reasons and behaviors that lead to a churning case, all you need is to approach these customers with a promotion or offer. Take the appropriate action that is aligned with your company policy based on these behaviors.

See it's not hard at all. all you need is some data and a free account in Enhencer. I am leaving some links to help you, so help yourselves now:

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Written By M. Ahmed Tayib
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