NACCM 2009: Profiting from Customer Churn

Profiting from Customer Churn
Ken Powaga, Senior Vice President, GfK Customer Research-North America

Is profiting from customer churn an oxymoron? The only good churn Ken’s heard from involves milk churning into butter.

Customers as assets. They’re the most important asset. They contribute to company success, employee motivation, quality, customer satisfaction and more. Each stage needs a metric to determine how well the business is going. The problem is that customers aren’t static. We’re getting new customers in and current customers are leaving. What are the profits from new customers versus the profits from leaving customers.

There are bad customers. They may not have lifetime value for you. With some customers, the top 20% of your customers may account for 80% of your profits. The bottom half of your customers eat up 30 of your profit.

-Define customer value
-Quantify reasons for churn
-Set strategic priorities