Views and Opinions from our Marketing Experts

How do you spot customer churn?

How do you spot customer churn?

Gideon Luke

Seems obvious perhaps but it can be more difficult than you think and disguised by the figures.

Let's take an example - you look at the amount of business you did in a quarter last year and compare it with this year. If it is similar, then management can take a view that the business is stable and customers are staying BUT....if your customers were staying and your customer acquisition is working well you should be seeing higher growth as you would have added to your customer base.

For example; you start with 100 customers and through acquisition, you gain another 50 over a year so you would end up with 150 total customers (minus natural attrition). You then start the next year and the value of the retained customers should offer your company growth at X% If you are not seeing that growth then perhaps you simply replacing lost customers with each acquisition of a new one.

A flat graph of retention revenue also demonstrates churn again because acquisition should be driving that figure upwards if retention is well managed.

What else can provide you with useful indicators? Number of closed accounts, Database comparisons between the same period of time, Various customer-facing departments who talk to customers and of course your reputation online.

There can be more to it than meets the eye and that's where I can help - not only do you want to identify churn but you need to pre-empt it with an appropriate customer strategy.