Identifying customers likely to churn

Zorn, S., Jarvis, W. and Bellman, S. (2008) Identifying customers likely to churn. In: ANZMAC 2008: Marketing: Shifting the Focus from Mainstream to Offbeat, 1 - 3 December 2008, Olympic Park, Sydney.

Preview

PDF - Published Version Download (132kB) | Preview

Abstract

As acquiring new customers is costly, it seems logical to keep and satisfy long-time customers rather than to acquire new customers. To reduce churn rates, firms should manage customers proactively to avoid losing churned customers. The study investigated how an Australian DVD rental firm can use customer data to derive indicators of satisfaction, attitude, and commitment to improve the prediction of customer churn in comparison to models calibrated on purchasing behaviour alone. The most significant predictor of churn in these data was a measure of uncertainty and commitment: the number of times a customer changed their subscription plan.