Customer segmentation and churn analysis

If you manage a large customer base one of the KPIs to monitor is what your churn rate is and how you can lower it as much as possible. Whether you are a telecom provider, web app service or some utility type of service, the question of keeping your customer base is a very important one. There are several elements that we believe should be addressed with regards to that question:

  • A proper churn rate calculation needs to be performed to estimate churn for the respective categories of services and individual services in question, taking into account service migrations, customer growth rate, as well as other relevant factors.
  • A predictive analytical model can be built to estimate the probability of churn based on customer characteristics. This will allow you to address the high-risk customers.
  • A forecasting analytical model can be created to assess potential impact on churn based on various scenarios (e.g. price changes). This can be used as a decision making tool to improve your top as well as bottom line.

Overall, we believe that, in today's market of increasing competitiveness and need for differentiation, analytical tools can be of substantial help in keeping and growing your customer base.