Churn Analysis



Churn Analysis involves the estimation of the probability that an existing customer of a Company will Discontinue its Relation with the company and possibly will switch to a Competitor.

This is a usual fact in highly competitive and fast changing industries such as Telecommunications.

An existing Customer may discontinue its relation because of:

  • Changes in his/her Personal Profile or Transaction data that make the relation unaffordable for him/her
  • Changes (less attractive) or insufficient Services from the Side of the Company
  • Better Offer (financial or service-wise) from a Competitor
  • Advertising Response to a Competitor Campaign
  • Other non-systematic reasons

To reduce Churning Rate, a Company should first Identify and then design a strategy to Prevent the above Systematic Churning reasons.

To identify Accurately and Quickly the major Churning reasons, a Company has to use Advanced Analytics tools with Pattern Discovery Capabilities (e.g. DECISION FORCE). Using Consumer Profile and Transaction data, these tools that can detect the Customer Groups that are more likely to Churn and Discontinue Relationship with the company.

Reducing the rate of Churn is a major issue because the Cost and the Effort of Acquiring a New Customer is much Higher than that of retaining an Existing one.