Objectives

Customer Retention/Churn enables you to identify existing customers most likely to leave and one-time customers who won’t return. Results from this application will enable you to build rules or profiles, with a high degree of accuracy, describing those customers for whom aggressive marketing campaigns will need to be used to retain them and thus significantly increase revenues. Only customers with high potential future value should be targeted.

The following screen shot shows one of the customer churn models used in scoring a customer data base.

Analysis and Customer Data

The following historic data and analyses are used to build more effective retention programs:

• Past customer account, sales and behavioral data is used to identify those customers who have left or not returned; high-churn or non-return clusters are created.
• Rules and profiles (customer attributes) are determined to describe those customers likely to churn or not return.
• Predictive models are built to indicate the degree to which an existing or a one-time customer is similar to those who have departed or not returned.
• The right customer incentive (based on historical experience) is offered to only those customers identified as leaving or not turning; customers not needing incentives are left alone (retains your full revenue otherwise lost to the incentive). Customers with little future value are left to churn.

Benefits

The benefits that can be realized from utilizing this solution:

• Increase revenue growth by retaining more existing customers rather than relying on the acquisition of new ones.
• Increase revenues by predicting which first-time customers won’t return and offer them incentives to stick around.