Customer Churn Prediction Machine Learning Solution

What is customer churn?

Customer churn, also known as customer attrition, is when a regular or subscribed customer stops purchasing a business' products or services in a given period of time.

Why customer churn matters

Customer churn is a strategically important concern for any business, as it directly impacts revenue and business growth.

Customer churn has an astonishingly significant impact on a business's bottom line, in fact, increasing customer retention by just 5% can increase profits by between 25% to 95%, according to a Harvard Business School report.

This dramatic increase is due to the fact that acquiring a new customer is far greater than retaining an existing one, as much as 5x greater, according to Forbes.

So from a business efficiency standpoint, it pays to ensure your existing customers stay.

What can you do about it?

Predicting customer churn ahead of time and taking actions impacts a business's growth immensely.

Customer churn prediction allows a business to strategically target at-risk targets with retention strategies, resulting in an increased likelihood of them continuing business, and stopping them from switching to an alternative.

How to predict customer churn?

Traditional statistical methods of churn analysis are costly, often requiring a team of analysts and a heavy investment of both time and money. Furthermore, the complexity and quantity of factors result in underwhelming accuracy.

Machine learning (ML) is a subset of AI, that uses algorithms to build data-driven predictive models, making it ideal to analyze complex customer and transactional data.

Predicting Churn with Machine Learning

To achieve a high quality result, a comprehensive solution is required that involves:

Complex and labor-intensive data processing steps.
Selecting the relevant factors that affect churn.
Applying the suitable machine learning algorithm.

However, this is not a trivial task and it varies depending on the nature of the business.

Predicting customer churn with no-code machine learning

The AI & Analytics Engine provides an easy-to-use machine learning template to predict customer's likely to churn before it happens.

Requiring no coding or data science experience, the Engine's Customer Churn Prediction Template provides both guidance and flexiblity, making it perforct for business professionals looking to build an end-to-end prediction pipeline themselves.

The Engine's Customer Churn Prediction ML Solution Template

With any customer churn prediction tool, it's important that you're able to tailor predictions according to the nature of your business.

The Customer Churn Prediction ML Solution Template has two options depending on your business model:

Transactional Churn: Predicting for each customer whether transactional activity will decline in volume or frequency.
Subscription Churn: Predicting for each customer the likelihood that they will terminate their ongoing paid subscription service.

To ensure results are meaningful and actionable, the template allows you to define the conditions for a customer to be considered churned.

All you need to get started with the CLV Prediction template is;