Predicting Customer Churn

Sometimes customers leave your service and therefore are seen to have churned. For SaaS companies in particular, churn is the among the few key drivers of business success or failure. This may not be as obvious as a closed account, however, with E-commerce companies having large volumes of ‘zombie’ accounts in their databases. Many organisations track the retention of different cohorts to better analyse growth activities and business success metrics. Yet, among the most difficult questions that still faces customer centric organisations are the questions surrounding the ‘why’. Why did the customer leave? Was this inevitable? Could we have predicted it? And therefore prevented it?

When the cost of acquiring a new customer is often estimated to be up to ten times that of retaining an existing customer, these difficult questions are worth putting under the microscope.