Customer Attrition and Retention

CUSTOMER ATTRITION
& RETENTION
Vizible Results, Inc.
© Vizible Results Inc

Attrition Analysis
•Identify accounts lost
•Conduct Exit Interviews for non-renewing customers
•Match this information against CRM database
•Gather Returns data – CRM or any other database
•Gather negative Social Media mentions
•Match all this information against Customer Satisfaction
Data [CSAT and NPS] if possible
*Collect
Data
•Objectively analyze the root
cause into the following ways:
•Price, Product, Delivery &
Service
•Customer Lifetime Value or
Account size [High, Medium,
Low]
•Customer Linkage Analysis**
Analyze
Data •Using the information from your
analysis:
•Design Customer Retention
programs based on your
attrition analysis
Design
Programs
*If you want to go one step further in data analysis, also analyze accounts that sales did not win
** Walk in the steps of your customer as they onboard your company
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Customer Service Data [CRM]
As Customer Service is the first line of defense, all these 6 Key Performance indicators are important in
managing customer experience.
• Number of calls made by the customer
• Were any of these calls escalated to the next level?
• How many calls were not resolved right away?
• What did customer satisfaction survey say? Were there any warning signs?
• How many times did we meet our Service Level Agreement?
• On an average, how long did it take for us to resolve the customer issue?

CUSTOMER DATA
ANALYSIS

Segment Customer Attrition data based
on CLV or Account size
Attrition of customers
with Low CLV/Revenue
with Medium
CLV/Revenue
with High CLV/Revenue
1. Segment data into 3 buckets based on
Customer Lifetime Value or Account size
2. Create heat map of root causes for each of
the 3 segments
3. Try to understand the root cause for the
customers with high CLV/Revenue first as
they usually spend more money with your
company.

Applying Customer Attrition Insights
• Using the analysis you have conducted on customer
attrition, it is now time to apply this information to your
current customer base.
• In the next section, you will now use these insights to
design programs to retain customers at risk by prioritizing
what issues need to be tackled first.

Retention Program
• Going back to our root cause of customer attrition, we need to design
programs around each of those reasons. These programs are mostly
cross-functional in nature.
• Typically Customer Service is the catch all for all service, product,
delivery and pricing issues.
• The following slides will go into depth on each of these root causes.
• Using the data you have gathered on non-renewals, returns etc. identify
customers who are at Flight Risk by designing an “Early Warning
System”
• Not all customers are equal. When customers call in into the call center,
they should be given treatment according to their wallet spend with your
company. Design a Case weighting system which will put certain
customers in front of queue for both call handling as well resolution.

SERVICE ISSUES

2. Omni Channel Experience
• Companies are always looking for ways to reduce cost of service. Cheaper services include
Chats, Forums, a good FAQ database that can be viewed on mobile etc.
• As a result, customers have various ways to get in touch with the company. In order to have good
customer service experience, customers should be able to use any channel to get in touch with the
company for any kind of problem. The onus is on the company to identify the nature of the problem
and have a faster resolution pending the channel and complexity of issue at hand.
• For example, a customer may call in via chat for a complex issue. It is up to customer
representative to understand that the issue cannot be resolved on chat and to transfer the
customer to a call center where more knowledgeable representatives are sitting, in order to get the
issue resolved.

Product Features
• Does your product lack some features? The marketing department should be regularly making the
assessment of the external environment to understand what features are being offered by
competitors. They should work with Engineering or R&D to prioritize the releases of these new
features.
• Information should also be gleaned from the Returns database to understand if customers are
favoring other competitor’s product due to certain features. This information should be shared with
Marketing.

PRICING

Customer Lifetime Value
As customers are viewed as assets of the firm, companies use different strategies to : attract new
customers, extract maximum value from customers and retain customers. This metric is the Net
Present Value a customer brings to a company, over a period of time, when he or she buys goods or
services from a company. It is a discounted sum of future cash flows. There are many ways of
calculating CLV, however in it’s simplest form – CLV is measured as:
CLV = (Annual Profit Contribution per customer
* Average Number of Years they remain as customer)
– Initial Cost of Customer AcquisitionThis document is a partial preview. Full document download can be found on Flevy:

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