Statistics show that acquiring a new customer can be five to twenty-five times more expensive than trying to keep an existing client. More importantly, improving customer retention by just 5 percent can increase profits by 25 to 95 percent, depending on the industry and company size. Today, many companies are absolutely fascinated by the idea of ​​using artificial intelligence (AI) to improve the customer experience. However, most people don't know how to start before they even embark on a technological solution ...

The best way to harness the power of AI and machine learning is to build an intelligent experience. These advanced technologies help gain predictive knowledge of customer behavior and incorporate it into CRM processes and procedures.

Change your focus

Customer retention through technology begins with a change of focus. Typically, businesses address customer churns and invest time in figuring out ways to keep them from growing. However, this is a very short-sighted tactic. Companies have to to focus on the overall view of the customer's life cycle and look for indicators that may cause the client to leave the company. This is the only way that will allow the company to predict further developments in behavior.

You will often find the best indicators of a possible churn in the early stages of the customer's life cycle - during acquisition and onboarding. The churn does not necessarily have to be caused by bad customer service, but by bad efforts to get a client.

Try to remember what happened in your business when you acquired a new customer. Did you launch a new product? Were there any changes in your production process? How long did it take for the customer to start using your service or product once the transaction was completed?

It is essential to assess the circumstances at the time of the acquisition. This is often when the perception of a relationship begins to take shape. Customers will compare their initial experience with the expectations you set during the sales process. Unfortunately, first impressions often change for the worse.

Check the costs

Before you take any steps to improve customer retention, you need to quantify the cost of their outflow. Three main variables need to be considered.

• loss of future income that you cannot count on when making a repeat purchase,
• loss of additional income due to upselling,
• customer acquisition costs.

By combining these factors, you gain a better understanding of the real cost of customers. Once you have determined the true cost of the outflow of customers, you can begin to assess their quality. You should be able to determine what is an acceptable level of utterance and set a benchmark using a basic analysis. For example, it may be acceptable for a customer to leave if service costs are high and margins are low.

Create an analytical basis for technological solutions

Implementing artificial intelligence is certainly a challenge, but it cannot begin without a clear analytical basis. So once you know the reasons your customers leave, quantify costs, shift your focus to the customer's entire path, and create basic analytics, you can start thinking about incorporating advanced technologies.

As mentioned above, the real value of advanced technologies is the ability to create an intelligent experience. Therefore, mere data and analyses are not enough, you have to be able to identify opportunities among them. Analytics teams, data analytics and business data mining companies can help you with this. They will help you find the key to customer satisfaction and enhance the customer experience, so that you no longer have to worry about high customer churn rates and worry about their reasons.

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