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Customer Churn: Do You Measure?

Customer Churn: Do You Measure?

I recently read an article reporting research conducted with the top 1000 UK companies. Findings reflected that customer defection rates in key UK consumer industries increased from 16.9% in 2003 to 19.1% in 2005.

Even though this survey was done in the UK, I’m sure there are many similarities. My questions to you are:

(1) Do you measure your churn rates?
(2) Do you find your customers are more mobile and fickle? (3) Are your rates increasing as well?
(4) Are your statistics, or the trend, the same or similar?

We can’t repeat, remind, and reinforce enough that attention must stay focused on existing customer development—taking customers from satisfied to loyal—rather than concentrating on new customer acquisition.

Interestingly enough, there was a study done by Peppers & Rogers and Meta Group that shows that only 12% of marketing dollars went to customer retention while 55% went to customer acquisition. To my thinking, it should be the reverse.



By the way, the UK report referred to above found that defection rates were most noticeable in the

? Banking industry where churn increased from sub-10% in 2003 to nearly 20% in 2005.
? Mobile telecoms retained the highest average customer churn at 33%.
? Utilities and mortgage finance contained rates under 14%

What’s the bottom line here? Strategies are necessary and critical to keep your good customers—even less expensive—than to win new ones. As Reichhold says as, often quoted in the Harvard Business Review, a 5% increase in loyalty can lead to 25-85% increase in profitability.

Remember the #1 driver for customer satisfaction is first call resolution. Go here to read more. http://www.human-technologies.com/FCR.html and here http://www.human-technologies.com/July04FirstCallResolutionRevisited.html and here
http://www.human-echnologies.com/Feb04FirstCallResolution.html
(past archived newsletters).


About the Author: Rosanne D'Ausilio, Ph.D., industrial psychologist, master trainer, best selling author, is president of Human Technologies Global Inc, a full service training organization specializing in human performance management providing needs assessments, instructional design, and live, customized, world class customer service skills training across industries. Also offered is university certification of agents and/or facilitators from Purdue University's Center for Customer Driven Quality.

Known in the industry as the 'champion for the human,' Rosanne is the author of Wake Up Your Call Center: Humanize Your Interaction Hub, 4th edition, Customer Service and The Human Experience (co authored with Dr. Jon Anton), Lay Your Cards on the Table: 52 Ways to Stack Your Personal Deck (now with a 32-card deck) all available at www.human-technologies.com, and her 'tips' newsletter on How To Kick Your Customer Service Up A Notch at www.HumanTechTips.com.

She sits on the advisory board of Help Desk Professional Association, is a columnist for TMCnet.com on Call Center Training, and represnts the human element for an Italian Software Company's advisory board, as well as being a dynamic, much sought after keynote speaker.




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