Customer Churn Analytics Solutions for the Industry
Customers remain an indispensable part of any organization, and the loss of a customer can have an adverse effect on the growth of the company. For any company to enhance their clientele in the telecom industry, organizations should devise an effective strategy to curtail their prevailing churn rates. As a result, most telecom companies have started adopting robust customer churn analysis solutions to improve the retention rate of profitable customers. In the telecom industry, retaining customers remains a serious challenge when compared to acquiring them. To effectively retain customers, leading service providers in the telecom industry have started analyzing the customer lifetime value to measure acquisition costs, revenue, customer service, and returns. In addition, businesses can further leverage the use of customer churn analysis to measure the relationship of subscribers at every stage with their operators.
Over the last couple of years, the market for personal care products has become diversified, owing to the penetration of new and innovative appliances and the growing disposable income among the consumers. With the growing demand for luxury care products, businesses in the retail industry are focusing on developing innovative products to cater to the wide array of demands. Additional facets that help in the growth of the personal care products include – the prevalence of international brands and the influence of rapid urbanization.
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Consequently, it becomes essential for the companies to gain an adequate understanding of the customers and their preferences. Since, customers are considered to be the pillar of any organization, prominent personal care products manufacturer should ensure that they are changing their technical and organizational processes to understand their customers and their attitude toward the organization.
Over the past few years, the ratio of customers switching over to other financial service providers has increased significantly due to the wide range of alternative financial products and competing providers. As a result, customer churn rates now lie anywhere between 20% to 30%. This has brought to light the importance of churn analysis and its role in customer retention. Also, reports suggest that customer churn has resulted in high costs in the form of lost profits. This not only signifies the loss of income from the customers themselves but also from other value contributors.
Though systematic recovery is still a rarity in today’s banking world, the probability of winning back lost customers looks promising with advanced churn analysis models that are capable of retaining customers. What’s even more interesting is the fact that the cost of recovering a former customer accounts for just one-third of the cost of acquiring a new one. Moreover, banks are generally well-aware of their former customers, their creditworthiness, how they use their products, and their preferences, making it easier for them to retain and recover former customers rather than acquiring new ones. Owing to such factors leading players are now leveraging churn analysis to understand and capitalize on customer behaviors.
This customer churn analysis engagement outlines how we used customer churn models to forecast churn probability of existing customers for a banking services provider. As a leading payments platform service provider, the client faced a number of challenges such as- increasing customer churn rate, fluctuating customer preferences, increasing competitive pressures, and fraud. This customer churn analysis engagement focuses on the ultimate challenge in customer churn management, i.e., preventing customer churn even before it takes place.
Customer churn is a critical business metric and businesses that have endeavored to minimize churn through a variety of marketing and product development programs alone may find it challenging. Request a free proposal to know more about our customer churn analysis solutions.
Customer Churn Analytics Challenges Faced by the Client
The client wanted to understand the market size of the telecom industry and effectively analyze the impact of churn rates on the overall functioning of the company. The primary objective of the engagement was to understand the customer usage information over a stipulated period and analyze their preferences.
The customers wanted to understand the latest retail industry trends and engage with customers through the right channel, with the right message, and at the right time. In addition, the personal care products manufacturer wanted to identify the customers who are at the risk of churn and take effective actions to retain them.
Though the client had made significant investments in gathering and storing customer data, less than a fraction of the investment had gone into using the data for practical business applications. The complexity of such disparate datasets was the primary reason that prevented the client from devising an extensive data-driven analytics framework. Additionally, the legacy BI tools used by the client further hampered their ability to handle complex data sets.
However, customer churn turned out to be the biggest and immediate problem that they needed to focus on. The banking services provider soon realized that keeping abreast with the numerical churn value alone was not proving helpful. Instead, they wanted to understand the root cause behind customer churn and leverage customer churn analysis to retain customers and explore customer behavioral patterns through analytics. As a result, they were looking at using churn analysis models to analyze payment patterns and to build sophisticated and effective programs to reduce churn.
After attending one of our webinars, the client decided to connect with our experts.
To know more about how our customer analytics helped a renowned personal care products manufacturer, request more information.
Revolutionary Customer Churn Analytics Solutions for the Client
Through a robust engagement, the client was able to analyze the usage patterns of customers in real-time and assess the intensity of subscribers’ churn rates and increasing competition from over-the-top services. Also, the engagement helped the client retain the existing customers and enhance the income stream. Effectively analyzing customer churn also helped the client leverage the use of real-time integration and predictive statistical model to increase the average revenue per VIP user. The client was further able to assess telecom traffic and detect changes in usage patterns and experience levels.
To tackle the challenge of customer churn the client chose to partner with Quantzig and leverage the use of churn analysis models to predict churn rates and modify offerings. The banking services provider needed to first redefine key metrics associated with customer churn. This would also help them set KPI’s and better understand the long-term health of the business.
The initial phase of this churn analysis engagement focused on the development of predictive customer churn models by leveraging existing churn reports and customer datasets. Phase two of this customer churn analysis engagement revolved around enhancing churn metrics and the accuracy of the delivered insights to both the operational and executive teams. Phase three of this customer churn analysis engagement revolved around delivering actionable insights to the clients’ operational team. This helped them speed the development of new programs and roll-out initiatives aimed at minimizing customer churn.
After a detailed churn analysis was performed, customers were selected for whom a high churn risk over the next few months was identified in the analysis. This was then followed up with a detailed understanding of their preferences which also paved way for identifying new upselling opportunities. The churn analysis solutions also empowered the client to compare scenarios, anticipate risks, identify new opportunities for churn reduction, forecast resources, balance risks against expected returns and work to meet regulatory requirements. By making analytics widely available they were well-positioned to align tactical and strategic decision-making to achieve business goals.
We developed hypotheses around churn rates and conducted data analysis to assess the reasons for churn. We developed a churn prediction model with high accuracy that updated risk scores for more accurate and timely retention actions. Our solution also helped the client develop retention offers and test their performance and expected results before implementation.
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Our solution helped the client gain insights on the reasons for increased churn. We also implemented an on-time risk flag mechanism which helped the client achieve more than a 25% decrease in customer churn rate and a 15% increase in repeat customers.
Customer Churn Solution Predictive Insights:
- Gain a 360-degree understanding of the telecom industry in terms of customer segment profile, past preferences, and usage patterns
- Witness a reduction of 25% in churn and 40% increase in average revenue
- Identify the key factors increasing churn rates such as network quality issues
- Gauge data about preferences, segments, usage patterns, and call center interactions
- Understand the subscriber behavior regarding churn or revenue enhancement