CHURN ANALYSIS

Churn Analysis

Churn analysis is the process of using data to understand why your customers have stopped using your product or service.

Analyzing your churn doesn’t only mean knowing what your churn rate is. It’s about figuring out why customers are churning at the rate they are, and how to fix the problem.

While similar, churn analysis and churn prediction aren’t the same. Churn analysis helps you understand why customers are canceling, so you can make a plan to reduce it. Churn prediction is forecasting the likelihood that a customer will churn based on feedback and historical data, so you can plan ahead.

Churn analytics helps companies plug the leak in their customer bucket, to borrow a common analogy. Many businesses prioritize attracting new customers over retaining existing ones and don’t notice the toll churn takes until it seriously erodes profits. By some measures, as many as 97 percent of customers who churn do so silently, without leaving feedback or clues as to why.

If a company acquires new users at a loss—not uncommon for business or consumer apps that spend heavily on ads—and those users don’t evolve into paying customers, it’s tough for the company to make money. With churn analysis, the team there can quantify the value of customers, the price at which it makes sense to acquire them, and develop ideas to increase retention and customers’ lifetime value. Benefits of a customer churn analytics tool:

  • Prevent revenue loss
  • Lower customer acquisition costs
  • Reduce marketing and sales costs
  • Improve quality of customer service
  • Increase opportunity for up-sell and cross-sell

To perform a customer churn analysis, you’ll need a database of customer information and a spreadsheet or other program to dig into the data. You may be able to export stats relevant to customer churn such as churn rate and customer renewal rates directly from various ERP modules to save time and improve accuracy.

While you can and should conduct a high-level churn analysis for all customers, to get meaningful insights, you’ll want to break that data down by product, region, client segment or other granular metrics specific to your company. That will give your team insights into where and potentially why you’re losing customers.

We serve all of our customers’ needs regarding the churn analysis. Our company, Arya Software, provides the best tool to bring you these systems that can be used in different areas and to provide technical support in this regard.