Corey Talking to a Camera About Detecting And Solving Customer Churn
Featuring Corey Pierson, CEO and Cofounder of Custora
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Top 10% of your customers driving 50% of your revenue. There's a next sentence of just often, if we look year over year, the revenue of that group, that 50%, if we look at what they spent in 2017, what they spent in 2018, lost 50% of that revenue.
Think of that: 25% of your revenue, you lost by customers cooling off, your great customers cooling off or churning out completely. 25% is a lot of revenue. It matters a lot to detect when people are downshifting or fading out.
First things first, just to put something in place, people are fading and how are we reaching them?
The second piece of that is how are you determining someone is fading?
Unfortunately, what most retailers say is that we got a rule: 90 days of inactive time, we send out we miss you or 365 days but, again, going back to the customer economics here, we love those loyal customers. We love that 10% that drive 50% of the revenue.
Turns out, they purchased pretty frequently. For most brands we work with, if they got a rule that's like at 365 days, that sucks. They're now inactive. The reality is those customers were buying every month.
Why didn't you reach out after two and a half months?