When was the last time your business had a health check? Probably not recently enough.
Customer retention is the most important investment a company can make. In fact, that's because the cost of acquiring new customers is far greater than the cost of maintaining existing ones. Once you've gone through the effort (and expense) of acquiring new customers, you naturally want to keep them.
However, even the best customer retention strategies are not fail-safe. Sometimes customers slip away and stop responding to your prompts. When that happens, it's important to proactively try to win them back – so let's take a look at your churned, but also recovered customers.
Definitions
Before you dive into data analysis, let's ensure that we are on the same page. There are five different customer groups considered in this report:
Recovered Customers | Number of customers who had a predicted churn risk ≥ 90%, but have placed another order again |
Churn Risk ≥ 90% | Number of customers for which the predicted churn risk has increased to ≥ 90% in the period under consideration |
Churn Risk < 70% | Total number of customers with a predicted churn risk < 70% |
A churn risk is calculated daily for each individual customers based on RX Prediction™. Prediction is performed via machine learning and searches data twins based on the following criteria:
- RFM Statistics (Recency, Frequency, and Monetary Value)
- Average Order Value
- Return Behavior
- Order Quantity
- Demographics
Based on this information, RX predicts the likelihood that a customer will continue to place another order. Finally, the churn risk is calculated as follows:
With every day that passes after the last order, the churn risk increases. However, when a customer places another order, the risk will decrease.
Use Cases
Knowing your customers brings real power, so put together all the data you are collecting about your customers and monitor your customer health to increase their engagement and retention. The report answers the following questions:
- Of all the customers you acquired, are you being able to keep them active or are you losing them?
- Do you need to counteract such developments?
- Do I need to prioritize reactivation campaigns to retain my customers?
- Can you reactivate more customers than you lose?
- Can I proactively implement something to stop them from churning before they do?
- Are you in danger of losing your customers in the long term?
What you Need
For this report to work properly, the following data must be imported:
- Order ID
- Order Date
- Stock Keeping Unit (SKU)
- Items Sold
- Item Price
- Customer ID
- Shipping Revenue
- VAT
- Discounts
- Product Returns
- Product Return Dates
- Customer Shipping Country
- Customer Shipping City
How to get More Details
Trends get even more clear by the growth rate comparing each data point with the previous period.
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