No company likes to mention it. No company wants to talk about it. Unfortunately, no matter how good your product or service is, customer attrition is inevitable. Customers leave for a variety of reasons. Some of which are in your control while others may not be in your control to fix.
For example, if you are a barbershop and your customer leaves because he moves half-way across the country to Texas, there is not much you can do. It would be unrealistic to think there is any type of marketing or strategy you could use at your small business to retain this customer.
However, if you are barbershop and your customer leaves because he is unhappy with the ability to schedule a haircut on short notice, that is a different story. In this case, he likes to be scheduled within 24 to 48 hours of his call and most of the time your barbershop schedules 72 hours in advance with very limited availability of walk-ins.
In this scenario, you do have control over the reason for attrition. Ultimately, there are actions you can take to retain this customer but have chosen not to.
No matter how good your product or service is, customer attrition is inevitable. Understanding trigger points that pushed them to the point of defection is crucial. Here are 4 types of market research studies to examine churn.
What is Customer Attrition?
Customer attrition is the percentage or number of customers who leave your business. It includes those who decide to stop using the product or service all-together, those who choose a competitor, or those who leave for a number of other reasons.
Customer attrition is also referred to as customer churn, customer turnover, and customer defection. It is a crucial metric to track for both large and small businesses. More so than tracking the attrition volume or percentage, understanding why customers churn is where the real value lies when analyzing customer attrition.
Why is Understanding Customer Attrition Important?
Some of the greatest insights you can learn about your brand, company, organization, product, or service are from customers who choose to leave. When a customer churns, he or she has reached the point of no return.
He or she has reached the threshold where it is more beneficial to no longer be a customer of your company than to remain a customer. Truly exploring these drivers to attrition and understanding trigger points which pushed them to the point of defection is crucial.
It is a perfect match for market research. Here are 4 types of market research studies to examine churn from our customer attrition market research company.
1. Customer Attrition Survey
Perhaps the most common approach to tackling customer attrition is an online survey. Why? It allows you to measure what as well as explore why. The what is tackled through a series of questions to help you categorize the top driver(s) for churn.
This might include items such as:
- Poor customer service
- Issues with billing
- Too expensive
- Better rates at a competitor
- Moved out of the area
This single question helps your team understand and break-down the results through items within your control (poor customer service) and items outside of your control (moved out of the area).
As a follow-up question, you also want to gather additional details on customer defection.
If someone selects poor customer service, you should include a follow-up open-ended text box that asks the former customer to explain the response. These free text boxes can often offer a lot of excellent details on the reason(s) for the attrition all from the perspective of the customer.
2. Customer Defection Focus Groups
Focus groups are more conversational than surveys. Online surveys are more passive and indirect, while a focus group uses a moderator to manage the discussion. The moderator can follow-up directly on comments and gather more context and detail which helps your brand go deep into the frustration points and motivations to defect from your brand.
The groups can often be very conversational and outspoken as former customers reveal their frustrations and pain points with a company. If you are a client viewing these groups, prepare yourself.
If you have more of a widespread customer base living in different areas of the country, consider online focus groups. Online focus groups offer the same benefits of traditional focus groups, minus the travel and facility costs!
3. Customer Churn Research Interviews
The benefits of customer churn research interviews are very similar to focus groups. It is a more conversational methodology when compared to a quantitative survey. However, these conversations are more personalized and private than a group discussion.
It allows for more one-on-one time with the facilitator so he or she can dig deeper into the drivers. The simple math is 10 participants in a focus group spread over 120 minutes equals 12 minutes per person (on average). Most interview sessions last about 15 to 20 minutes (or more) each.
These individual interviews eliminate any group think or group bias as well for what is likely to be an engaging and heated discussion.
Customer churn research interviews can take place over the phone, through a web interview, or in-person.
4. Customer Turnover Mystery Shopping
Why not go directly to the source? If customer service or support is a true issue that is driving your customers away, sometimes mystery or secret shopping is the best methodology. These can be designed using Market Research Assistants and Analysts.
These professional researchers pose as real customers using real scenarios to interact with your front-desk staff, telephone support staff, web chat customer service staff. This first-hand knowledge will lend a lot of insights into the customer experience (CX) and what is causing customer attrition.
It might have something to do with bottlenecks in the process or particular staff members who are driving customers away.
One more hidden benefit of customer attrition surveys...
A hidden benefit of customer attrition surveys with our market research company that is not often discussed is the level of response and detail we obtain. When a customer leaves a company or brand, in many cases they are very dissatisfied.
This is an experience they want to share and is often not provided the opportunity by a company (i.e., why did you leave or what could we do better?). In these situations, these detractors will often vent to friends and family which drives down your perception.
Simply asking customers why they left and what can be improved is an excellent tool to allow them to vent while collecting valuable information to prevent more churn in the future. The level of detail and sentences upon paragraphs of reasons why customers left can be very telling.
Drive Research is a customer attrition market research company located in New York. Our suite of qualitative and quantitative market research services help your organization understand the what and why behind customer attrition, churn, turnover, and defection.
Need a quote? Want to request a proposal? Contact us.