Retail Churn and Retention
Average customer churn rates across consumer industries can vary widely from -10% to 60+% per annum. Retail marketers will know it costs more to acquire a new customer than to retain an existing one – up to 10x more – but in an increasingly competitive retail environment, and as customers become ever more savvy about using the internet to research products and find the best price, it’s a bigger challenge than ever to hold on to your customers.
As a business, understanding your customers’ behaviour and identifying issues within your own business performance is key to identifying what variables have a significant impact on churn rates.
Factors that can lead to customer churn:
- Unsatisfactory customer service: poor customer service is cited more than any other reason by consumers for discontinuing their relationship with a particular service, store or brand.
- Customer research: the internet has empowered the customer with choice, given them the opportunity to do their research, read reviews, ask for recommendations, search for the best product at the best price, and find out what other customers are saying about you.
- The shopping experience: customers want a multi-channel shopping experience and this includes being able to shop with you, whenever and however they want. If they can’t find what they want, purchase when they want and sign up with you at their convenience, they’ll look elsewhere.
- Your ecommerce journey: if you’re experiencing pre-purchase churn on your website store or sign up functionality, it’s likely your customers are having problems completing their actions, or they’re seeing something they don’t like or understand at some point in the journey.
- Merchandising assortment, availability and price: Quite simply, if you don’t have it and at the right price, you risking losing your customer.
At Fuzzy Logix we work with our clients to minimize churn by using data mining customer segmentation, specific data analysis and predictive analytics to:
- Understand customer demographics and behaviour
- Identify the likelihood of churn
- Improve customer service
- Optimize merchandizing assortment
- Develop effective and consistent customer communications