How to use software for customer churn to improve customer retention – Qymatix Example
Reduction of customer attrition by implementing a churn prediction software in your sales reporting
Understanding and avoiding customer churn ( or attrition) in Business-to-Business(B2B) organisations can make the difference between a successful financial year or a miserable one.
Every experienced sales leader knows that some customers will eventually churn. Studies in the field of customer retention talk of a 5 to 25 % customer churn per year, depending on the industry. Customer attrition is revenue lost.
A B2B company takes a long time to switch vendors. There are typically signals indicating attrition-risk. Once those signals are detected, swift action is critical.
Both steps, predicting and preventing customer churn, can represent a challenge for a key account manager splitting his time between finding new customers and hitting his quota.
How can a sales leader help her sales team spot a customer at risk of churning before it is too late? With the help of predictive sales analytics.
Churn Management Software: Let the Robot do the maths for you.
B2B sales teams serve an increasing number of customers. The pressure to reach annual figures makes this a particularly challenging task.
The tension between keeping customers happy and reaching sales goals creates a situation where distraction kicks in, key account managers tend to relax about the customers currently buying.
Professional sales managers always mind their best accounts, of course. Churn quickly arises within their second tier of accounts – customers with lower revenues. Under pressure to keep big customers happy and to find new ones, salespeople easily oversee churn warning signals.
There is where predictive sales analytics and artificial intelligence help sales controlling and customer retention. Instead of waiting for a customer to flip vendors, with the help of advanced predictive algorithms, a sales leader can provide her sales team with timely advice. A warning signal followed by action (such as a call or a visit) can prevent a customer from churning.
ERP sales transactions are one of the most valuable pieces of information to predict customer churn.
The financial numbers of the last sales periods, usually tracked on an ERP System, are one of the most valuable pieces of information to predict customer churn. Recent studies show that in Business-to-Business, behavioural variables (such as time between transactions) and financial variables (such as margin) had a significant effect on predicting customer churn. In simple terms: use your past sales data to make predictions about future customer churn.
How to do this with your customer churn prediction software? Use the main churn dashboard to predict and identify the number of customers at risk of churning. Instead of waiting for a customer to say goodbye, sales managers can sort their customers according to how high the risk of customer churn is.
For example, the churn dashboard above shows churn-risk vs relative margin – a proxy for customer value. Finally, the bubble-size represents revenues. With this dashboard, a sales leader can understand and analyse churn risk vs customer value.
Qymatix customer churn software also presents you with a list of customers, as shown above.
Go beyond a customer churn dashboard: dig deeper to retain the customer.
Once the sales leader has a focus on the customers at risk of churning, she can start digging deeper, answering questions such as:
>> When was the customer last contacted?
>> What do customers at risk buy?
>> When do they buy our products and how often?
>> How is this customer performing, compared with the rest of the customers?
From the previous view, by clicking on each customer card, the user can access a detail view of each customer. In this third layer, the user can access the most relevant key performance indicators for a particular account. Also, here, the user can compare how this specific buyer is performing versus the rest.
First, re-order your customers based on churn risk. Second, dig deeper into one of them. Last but not least, do something about it.
How to make your sales team successful? Take action.
Once the sales manager has identified a customer at risk of churning, taking immediate action is crucial. In Business-to-Business, where sales cycles are long, taking putting early attention on customers about do defect can make a significant financial impact.
Good churn prediction software provides a sales leader with a list of the actions that her key account manager has undertaken in any customer. Has your sales rep visited this customer in the past? Is he pursuing any open project of sales opportunity?
If Churn Prediction Software finds a high-risk client that your key account manager has long forgotten, it’s time to act. Successful sales managers improve customer retention by working promptly. Add a new sales plan and discuss the situation with your customer!
Voluntary customer attrition is the effect of customer dissatisfaction or more successful sales or marketing from your competitors.
Predicting customer churn is the first step in pursuing an effective retention strategy. By implementing a retention strategy, companies can benefit from lower servicing costs, coupled with higher revenues.
Do you have any further questions on customer churn and attrition? Please write to us today; we are happy to help!
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Kuanchin Chen, Ya-Han Hu, Yi-Cheng Hsieh. “Predicting customer churn from valuable B2B customers in the logistics industry: a case study”. Information Systems and e-Business Management. August 2015, Volume 13, Issue 3, pp 475–494.