AI customer churn

Preventing Customer Churn With the Help of AI

Preventing Customer Churn With the Help of AI

Customer churn refers to the rate at which customers stop using the company’s services or products for a specified period of time. 

It has a significant negative effect on businesses as it reduces revenue and profits. In the US alone, $ 136.8 billion is lost annually due to avoidable customer churn.

For exactly that reason, it is important for a company to have customer retention strategies in place. Retaining customers not only helps businesses establish valuable customer relationships, but also increases profitability.

In fact, acquiring new customers costs 5-25X more than retaining existing ones.

Today, especially in such a competitive economy with wide availability of competitors, companies began to pay more attention to customer churn and have been implementing different strategies to prevent clients from leaving. However, AI has proven to be the most effective solution when it comes to customer churn.

Let’s take a look at how Artificial Intelligence helps companies with customer retention and churn prevention.

Churn prediction 

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One of the biggest benefits of AI is that it can help companies predict which customers are likely to stop using their services or products.

How exactly can AI do that? The main characteristic of machine learning algorithms is to find links and patterns in historical data, learn from them, and apply what they have learned to new data.

The same applies to predicting the churn, from the data collected from customers, companies can identify the activities that contribute the most to the loss (decreased engagement, dissatisfaction, etc.). Later, machine learning algorithms are fed with this data, trained to identify such activities in user behavior and alert businesses about a potential churn.

The ability of artificial intelligence to accurately predict the future churn rate helps companies identify the causes of churn, implement effective retention strategies, and ultimately improve profitability.

Let’s sump up the necessary stages from an effective customer churn prediction: 

  • Data collection – The better the quality of the data, the greater the confidence in decisions. With numerous user interactions with your services, the amount of data can be overwhelming. Ensuring good quality data translates to better results.
  • Feature selection – To get the best result, we need to focus on the features that contribute the most to our output (churn). Including irrelevant features in our data can damage the accuracy of the model.
  • Deploying machine learning models – We feed the correct data to our machine learning model to get the prediction that suits your needs.
  • Prediction – Finally, after all these steps, you get the churn prediction and can make a business decision based on historical data, not intuition.

Going beyond prediction

While churn prediction is a vital part of customer retention, it doesn’t fully address the issue. Companies must employ various promotional strategies to ensure that the customer interacts with the business again and continues to use its products/services.

Here, as in the previous example, artificial intelligence can be a powerful tool to achieve these goals.

Prediction alone does not mean that the customer will not leave your business. To ensure customer retention, companies should approach users with incentives.

It is important to offer the customer a discount or promotional program to show that you care. Artificial intelligence systems can automate such activities while taking into account what churn stage the client is in.

Artificial intelligence can also determine what type of promotional offer can achieve the best result for the highest engagement and retention for each individual customer. Based on this, the system can automatically personalize the promotional offer without the need for human participation.


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Today, one of the main goals of any business is to retain customers for as long as possible, as it boosts the revenue of the company and increases the lifetime value of the customers.

Artificial intelligence and machine learning are the perfect solutions for customer retention and churn prevention. Information and analysis based on customer data can be delivered to the company’s business systems and dashboards, allowing them to be proactive and ensure that their clientele continues to use products/services.

If you want to improve your customer experience and reduce churn rate, schedule a free consultation call with our AI experts and let’s see how we can get the most out of your data.

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© 2021 - MaxinAI | All Rights Reserved
© 2021 - MaxinAI | All Rights Reserved