Unveiling Bubo.AI cbx Customer Churn Detection and Prevention
1 in 10 customers are lost each year.This customer churn costs you growth, revenue & profit.
You can manage customer churn
As a merchant you are focused on winning new customers to grow sales. However, it’s what’s happening to your existing customers that makes all the difference. Find out how to predict and prevent customer churn.
Did you know that most businesses loose around 1 in 10 customers each year?
That means builders merchants have successfully grown by a net ‘5%’ in revenue, but when we look at the customer behaviour, actual growth is 10% because of a decline of 5% caused by customer churn (loosing existing customers).
Why knowing when customers are about to leave is so important?
- Harvard Business Review reports that a 5% increase in customer retention results in more than a 25% increase in profit
- It costs 5x as much to attract a new customer than to keep an existing one
- Gartner Consultancy says that 80% of future revenues will come from just 20% of your current customers
- A 2% increase in customer retention is the same as decreasing cost by 10%.
It costs 16 times more to bring a new customer up to the same level of contribution as an existing customer
If keeping a customer is so important, why are businesses not addressing it? The problem is visibility and how customers leave; they ‘sneak’ out and are not spotted until it’s too late.
Want to double your growth rate by preventing customer churn?
WHO Which customers are likely to leave your business in time for you to change it.
WHEN are they going to churn? Based on their behaviour, when is it likely they will leave
WHAT products are going to be impacted? Churn customers have their product basket; as customers churn, the product growth is also impacted.
WHERE are they located? Which branches, geographical areas of the business are more prone to be negatively impacted by the churn customers?
WHY are they likely to leave? Has your customer service level declined, product availability dropped? Knowing the reason makes you better prepared to take the action.
1. Which customers are likely to churn?
A customer loss rate (churn) of 5% may not sound all that bad, especially when you consider that it is very difficult to retain every customer. Yet it is estimated the loss of those customers would reduce profit by as much as 25%. If you don’t have visibility in advance of which customer is going to leave, you can’t work to keep them. They rarely just ‘fall off a cliff’, but begin making small purchases from other businesses. Key to preventing the complete loss of a customer is identifying these minute changes in purchasing behaviour and intervene. The conventional approach to spotting customers who may churn was revenue fall; this simple approach is flawed as a single large purchase in one month, then none in the second month would trigger an alert when in reality it is ‘normal’ business.
2. When are they likely to churn
If you want to impact customer churn you need to have sufficient visibility ahead to be able to intervene, ideally 12-weeks in advance. The shorter the 12-week window gets, the greater the certainty that the customer will go to a competitor. Our cbx platform is able to identify ‘at risk’ customers up to 12-weeks in advance.
3. Why are they likely to churn?
The reasons why customers leave are not always preventable, but by bringing visibility the business can make an early intervention to address the issue. Reasons why customers leave:
- Poor service
- Lack of contact
- Key contact moves to a competitor
- Product range
4. Where are they located?
Competitor activity is also a key reason why customers can churn. When that happens, it’s likely to be more than one customer that will slowly reduce spend, and the revenue decline will become more of a branch problem than a single customer challenge. Bubo.ai cbx identifies these shifts in spend pattern so you can make timely interventions.
5. Which products are the churning customers impacting?
Each customer has a basket of products that they buy regularly. So looking at the customer churn rate also translates into the revenue decline at the product level. The aggregate customer’s basket and churn rate will impact your business in many ways:
- Excess stock and distorted replenishment process
- Procurement forecasting
- Reduction in contracted supplier rebate
Get in touch with us today to transform your customer churn and retention rate. Remember that a 5% increase in customer retention rate can increase profits by 25%.
Identify ‘at risk’ customers before your business loses them.
Bubo.AI cbx provides you with visibility of ‘AT RISK’ customers up to 12 weeks in advance. See the early signs of customer churn before it actually happens.
- Gives you complete visibility and insight of your customers
- Provides a clear view of each customer’s growth trend
- Makes you aware of any potential drift
- Measures the chance of each customer leaving over time
- Shows which customers are your ‘rising stars’ and growing