What is Churn?
Churn is a term used to quantify a percentage of people who leave a group, organization, or company within a given time period. In the market research world, churn most commonly relates to customers, as in defining the percentage of customers who leave a company within a given year. Churn can also relate to employee turnover, as in the number of employees who leave an organization in a set amount of time. Lastly, churn in market research is also used to denote the number of respondents who leave an online panel or those removed from a panel. Do you work with an online panel company currently, here are 3 cautions when using an online panel.
Is there good and bad churn?
Yes, based on those definitions and examples, there is good churn and bad churn in market research. When looking for a panel vendor who offers quality respondents and panelists, you'll want to look for a firm offering a higher churn rate, meaning the panel vendor continually weeds out bad respondents and accepts new ones. A high churn rate in an online panel means the managing company applies the right rigor in the database to offer clients higher-quality respondents.
However, in terms of employee churn and customer churn, you want to see a lower churn percentage which translates to stronger loyalty with a company or organization. Customer churn is a hot topic in market research, and many organizations commission large projects to understand why its customers leave and what competitors they chose.
What are some examples of market research projects addressing churn?
A simple example of a churn study is when a bank or credit union commissions a market research company to conduct a survey on those who recently closed their accounts. The survey addresses why they closed the account, if they went to a competitor, what competitor they went to, and why they chose the competitor. This data can be used to create customer-facing strategies to mitigate churn in banks and credit unions.
For example, let's say you find out 36% of customers closed their accounts because they are unhappy with the fees. You can create a strategy for tellers to address this as customers come in to close their account. Your bank can train tellers to highlight other products which offer lower fees or no fees at all, or offer the customer an opportunity to discuss their account with an advisor on-site. These simple strategies may not prevent all churn at your financial institution, but will certainly help lower it.
Drive Research is a market research firm in Watertown, NY. The team specializes in all types of market research studies including those which address churn. More more information on our market research for banks and credit unions, read more here. Contact us at email@example.com or call us at 315-303-2040.