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Aria Systems was founded on the simple yet powerful notion that cloud billing holds the key to lasting customer satisfaction and long-term business growth. We help innovative companies around the globe bill to win, using our cloud-based, enterprise-class platform for subscription and usage-based billing.
Brad Hog | bradhog

Cutting Edge Software to Reduce Churn!

Sep 4th 2014 at 6:52 AM

The act of a customer in ceasing relationship with a company is known as customer churn, irrespective of whether he is a subscriber or just plain user of services. It is not necessary that a customer has to inform the company of his intention to part ways. In business, especially online businesses, he is treated as churned if there is no transaction over a set period of time. There are huge costs involved here which include revenues lost and marketing costs for getting additional customers. It is thus no surprise that churn is a major issue for any company and they install reduce churn software to forestall this.

There are techniques that try to predict customer churn based on certain indications of his behavioral patterns. This is naturally important if efforts are to be made to retain him through pro-active marketing strategies or incentives. However all these models and analysis are fully dependant on customer data present now and some even rely on information founded on old statistics. Future conduct of customers is not in-built here. Hence, while there may be a certain element of effectiveness in identifying risk customers, the procedure is by no means fool proof.

The drawbacks highlights the importance of reduce churn software to make the process of identification more scientific. It is founded on the premise that customers’ behavior will change over time. For any customer, there will a shelf life, which is the time he is likely to stay with the company. Marketing strategies can then be built around this factor. Another element of the software is to break down customer databases into micro-segments taking various aspects into account, mainly demographic segments where trends can be forecast. These are not iron clad and customers can be moved from one segment to another. Through intense research on the features of each segment, it is possible to accurately forecast customer patterns and when they are likely to churn.

The utility of the reduce churn software does not simply stop at giving early signals of customers whose relationship value with the company is nearing its end (this might even be if they are presently active). It also enables the company to draw up plans to maximize revenue from them before they churn as well as draw in new customers well in time. Hence, this predictive software has been a boon to businesses, struggling to cut down on the debilitating effects of customer attrition.

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