Predictive Attrition Models

Companies work hard to keep their customers. Customer retention means more repeat business, and more repeat business means more revenue streams for your company without the costs involved in attracting new customers. Yet losing customers is an inevitable part of a business.

Even the best company can’t keep all of their customers. Luckily, there are ways that you can increase your customer retention rates – by creating a predictive attraction model.

In general, customers don’t simply leave your company. They leave your company for another company. They also leave your company for various reasons.

You can use these two facts to your advantage. You can start my utilizing your customer satisfaction survey to try to get data on customers that may be in the process of leaving. You can also see if there is a way to survey customers that have defected.

See if there are any trends. You can do this through surveys, as well as through other data mining techniques that look at purchasing habits, contact – anything that gives you a sign your customers may be losing interest. You should also look into what your competitors may offer that may have won over your customers, or simply how they market themselves and see if that marketing style makes the customer think they fill a need.

Once you have gathered that data, you can create a predictive attrition model that notifies you when signs show a customer may be looking to leave you for a competitor. Once you’ve created that model you should be able to do two things: Address the reasons they are leaving to prevent future defections. Find motivators to keep your customers from wanting to leave.

Once you’ve created this type of model, you can create profiles of customers that are about to leave your company and address them accordingly. This will lead to longer customer retention, greater profits, and is a far better use of resources, and should provide you with tools to help in both the short and long term. Predictive attrition models are underused tools in customer relationship management.

Much of the money people spend is on how to get more money from the customers, but often figuring out how not to lose customers is ignored. It is something that most businesses will need to strongly consider in their CRM models.