Your company provided you with data about sales, customers, and products. You review the data and find yourself concerned when you notice the high customer churn rates (loss of current customer-base).
Discuss some methods or applications of data science that can help identify potential customer churn and how it can help prevent customers leaving (retention).
Introduction Business entities are set up in order to make a profit. Therefore, every business must identify some possible criteria they have to use in order to ensure they remain relevant and undertake their relevant activities and enhance their sustainability. Therefore, the business ought to check all its departments by undertaking a thorough audit to find which department is not generating revenue for the organization (Grainger-Brown & Malekpour, 2019). Once this kind of phenomenon business is likely to justify what needs to e undertaken. To set records straight this report justifies that there is the possibility of a loss of the customer base if the business is not keen on what they are undertaking. This may include and is not limited to the following.
Technology: The technology being utilized by the company has an effect on the
organization. Customers whose business has adopted modern technology are bound to attract more customers simply because of the advanced practices. As opposed to obsolete technology which shuns customers away. This would simply mean technology will attract some customers simply because of subsidized costs.
Mechanism of conveying feedback: Customer feedback in a business is pertinent and is part and parcel of the business. Feedback from customers should tell what needs to be improved by the business to the customers (De Oliveira Santini et al., 2020). This fully translates to what is required effectively and entirely. This has an impact on increasing customer base or losing them. Therefore, should be instituted in a mechanism that ensures the flow of information from the organization to the customers. This will also encompass the flow of information from management to the staff.
The product being sold: The quality of the product being sold has an impact on the customer base rate. Frankly, each and every customer would love to be provided with products of good quality. Customers need to see the worth of their money. Businesses that lack good high-quality resonating with customers' preference becomes dangerous for them. This will in turn lead to customers drifting away from the business.
Methods To Enhance Customers Retention
Implementing Machine Learning Models Creates Predictive Models.
Data analytics and business intelligence have become some of the key areas of concern that businesses are undertaking in order to identify the gray areas which they need to undertake in order to improve the profit margin of the organization. Machine learning models which are components of artificial intelligence can be used to make a prediction based on the data available. This clearly stipulates that appropriate decisions can be done using a data-driven approach. This includes using predictive analytics whereby solid customer retention strategies can be enhanced by using categorical data and historical data (Baboota & Kaur, 2019). Machine learning models such as Convoluted neural networks will be used to make a prediction on the likes and dislikes of customers. If the pattern of customers is identified then, quality products that resonate with customers' preferences will enhance their retention automatically.
Perform Customer Segmentation In Order To Retain The Best Customers.
Segmentation of the customers in the business setting is one of the important criteria which can help the business to identify which customers are associated with the specific brand of the products. Therefore, customer retention will be based on the kind of product which is offered by the customer by the business enterprises. Customers segmentation can be achieved by ensuring that the business can adopt modern technologies such as power BI, python, and tableau to make classification through predictive analytics (Ahmad et al., 2019). This makes the business analyst look at each customer's sub-group and draw insights from the data which is available. This will be coupled with the best communication strategies and services will lead to businesses being able to retain customers based on the data they have.
Focus On High-Quality Leads.
Customers are less likely to churn if you align your primary goals to target customers. This would simply mean that your predictive mechanism and patterns are more succinct and salient in enhancing the progression of the business in the right direction (Kozak et al., 2021). Most importantly worthwhile appropriate decisions can be done if they are supported by voluminous and succinct data. This makes it even more interesting. When you have access to data it is easy to draw insight from it by comparing data for both customers and potential customers who are worthy of retaining from the business.
To achieve all that has been specified in this case one needs to carefully apply the well-suited algorithm in a bid, to compare the features and characteristics of your customers and those of potential customers. Identifying potential customers is a gradual process that requires thorough scrutiny simply because it will involve identifying the source of the income of the individuals. Most individuals don't disclose their business activities (Nakajima & Nakauchi, 2021). This becomes one of the difficult approaches of the business to really associate the customers with their source of income and hence makes some retention aspects.
Focus On The Customer's Experience.
The experience of customers on the consumption of specific products has a greater impact on the customer's retentions. The focus on customer experience all depends on the consumption of certain products which the business in question needs to address emphatically. Customers' feedback should be taken seriously simply because they mean a lot to the experience they have with the products.
The customer's feedback can be achieved and obtained fully by having an institutionalized process that enables customers to channel their grievances and disappointment with the specific product to the business organization (Darzi & Bhat, 2018).To achieve this, we require a profound technological approach that requires capturing data from the customer's concerns.
Develop a customer churn model which will be a kind of data science approach in ensuring the mechanism upon which this data will be enhanced. Therefore, correct predictions can be undertaken fully in the business by ensuring they are well fit in making appropriate decisions pertaining to the experience of the customers (Simanjuntak et al., 2020). The feedback will be analyzed fully and provide the best approach to enhancing the business customers' retention.
Offer Technologically Based Products
Technology has become one of the key products which are being used by the business sectors. Therefore, diversifying your method of product acquisition means a lot for the business. Technology can be used to reduce the cost of products by customers retaining them for business imperatives.
References
Ahmad, A. K., Jafar, A., & Aljoumaa, K. (2019). Customer churn prediction in telecom using machine learning in big data platform. Journal of Big Data, 6(1). https://doi.org/10.1186/s40537-019-0191-6
Baboota, R., & Kaur, H. (2019). Predictive analysis and modelling football results using machine learning approach for English Premier League. International Journal of Forecasting, 35(2), 741-755. https://doi.org/10.1016/j.ijforecast.2018.01.003
Darzi, M. A., & Bhat, S. A. (2018). Personnel capability and customer satisfaction as predictors of customer retention in the banking sector. International Journal of Bank Marketing, 36(4), 663-679. https://doi.org/10.1108/ijbm-04-2017-0074
De Oliveira Santini, F., Ladeira, W. J., Pinto, D. C., Herter, M. M., Sampaio, C. H., & Babin, B. J. (2020). Customer engagement in social media: A framework and meta-analysis. Journal of the Academy of Marketing Science, 48(6), 1211-1228. https://doi.org/10.1007/s11747-020-00731-5
Grainger-Brown, J., & Malekpour, S. (2019). Implementing the sustainable development goals: A review of strategic tools and frameworks available to organisations. Sustainability, 11(5), 1381. https://doi.org/10.3390/su11051381
Kozak, J., Kania, K., Juszczuk, P., & Mitręga, M. (2021). Swarm intelligence goal-oriented approach to data-driven innovation in customer churn management. International Journal of Information Management, 60, 102357. https://doi.org/10.1016/j.ijinfomgt.2021.102357
Nakajima, Y., & Nakauchi, M. (2021). Business internationalization and Co-evolution of organizational identities. Academy of Management Proceedings, 2021(1), 14041. https://doi.org/10.5465/ambpp.2021.14041abstract
Simanjuntak, M., Putri, N. E., Yuliati, L. N., & Sabri, M. F. (2020). Enhancing customer retention using customer relationship management approach in car loan bussiness. Cogent Business & Management, 7(1), 1738200. https://doi.org/10.1080/23311975.2020.1738200
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