ANALYTICS PLAN TO REDUCE CUSTOMER CHURN AT YORE BLENDS Himabindu Aratikatla University of the Cumberland's March 22, 2020 Introduction Yore Blends (YB) is a fictional online company dedicated to selling subscription-based traditional spice blends coupled with additional complementary products. Yore Blends (YB) aspire to growing through mergers and acquisitions. To do this, they need a strong customer base and steady revenue. Yore Blends is concerned with the rate of customer churn.   Company’s Problem Yore Blends has been in existence for years. Nonetheless, the company is considering to expand through mergers and acquisition. However, they are experiencing customer churn. A considerable percentage of its clients don’t purchase their goods anymore. As a result, the company needs to reduce customer attrition by at least 16%. Causes for Customer Churn Poor customer care service: The company minimized rather than maximizing client cost Bad onboarding: Yore Blends clients failed to get value for the purchased products. Clients might have lost interest in the company’s products. Many companies think of customer service as a cost to be minimized, rather than an investment to be maximized. Here’s the issue with that: if you think of support as a cost center, then it will be. That is, if you don’t prioritize support and work to deliver excellent service to your customers, then it’s only going to cost you money…and customers. A disproportionate amount of your customer churn will take place between (1) and (2). That’s where customers abandon your product because they get lost, don’t understand something, don’t get value from the product, or simply lose interest. Bad onboarding – the process by which you help a customer go from (1) to (2) – can crush your retention rate, and undo all of that hard work you did to get your customers to convert in the first place. 4 Causes for Customer Churn (Cont.) Limited customer success: Lack of updates regarding new products Extended absence of the company-client communication Natural Causes: Customers may have grown out of the products. May have resulted due to Vendor switches might While onboarding gets your customer to their initial success, your job isn’t done there. Hundreds of variables – including changing needs, confusion about new features and product updates, extended absences from the product and competitor marketing – could lead your customers away. If your customers stop hearing from you, and you stop helping them get value from your product throughout their entire lifecycle, then you risk making that lifecycle much, much shorter. Furthermore, Not every customer that abandons you does so because you failed. Sometimes, customers go out of business. Sometimes, operational or staff changes lead to vendor switches. Sometimes, they simply outgrow your product or service. (Salloum, 2016) 5 REASONS TO ANALYZE CUSTOMER CHURN The company will be in a position to understand c ...

1. ANALYTICS PLAN TO REDUCE CUSTOMER CHURN AT
YORE BLENDS
Himabindu Aratikatla
University of the Cumberland's
March 22, 2020
Introduction
Yore Blends (YB) is a fictional online company dedicated to
selling subscription-based traditional spice blends coupled with
additional complementary products.
Yore Blends (YB) aspire to growing through mergers and
acquisitions.
To do this, they need a strong customer base and steady
revenue.
Yore Blends is concerned with the rate of customer churn.
Company’s Problem
Yore Blends has been in existence for years.
Nonetheless, the company is considering to expand through
mergers and acquisition.
However, they are experiencing customer churn.
A considerable percentage of its clients don’t purchase their
goods anymore.
As a result, the company needs to reduce customer attrition by
at least 16%.

2. Causes for Customer Churn
Poor customer care service:
The company minimized rather than maximizing client cost
Bad onboarding:
Yore Blends clients failed to get value for the purchased
products.
Clients might have lost interest in the company’s products.
Many companies think of customer service as a cost to be
minimized, rather than an investment to be maximized. Here’s
the issue with that: if you think of support as a cost center, then
it will be. That is, if you don’t prioritize support and work to
deliver excellent service to your customers, then it’s only going
to cost you money…and customers. A disproportionate amount
of your customer churn will take place between (1) and (2).
That’s where customers abandon your product because they get
lost, don’t understand something, don’t get value from the
product, or simply lose interest.
Bad onboarding – the process by which you help a customer go
from (1) to (2) – can crush your retention rate, and undo all of
that hard work you did to get your customers to convert in the
first place.

3. 4
Causes for Customer Churn (Cont.)
Limited customer success:
Lack of updates regarding new products
Extended absence of the company-client communication
Natural Causes:
Customers may have grown out of the products.
May have resulted due to Vendor switches might
While onboarding gets your customer to their initial success,
your job isn’t done there. Hundreds of variables – including
changing needs, confusion about new features and product
updates, extended absences from the product and competitor
marketing – could lead your customers away. If your customers
stop hearing from you, and you stop helping them get value
from your product throughout their entire lifecycle, then you
risk making that lifecycle much, much shorter. Furthermore,
Not every customer that abandons you does so because you
failed. Sometimes, customers go out of business. Sometimes,
operational or staff changes lead to vendor switches.
Sometimes, they simply outgrow your product or service.
(Salloum, 2016)
5
REASONS TO ANALYZE CUSTOMER CHURN
The company will be in a position to understand client behavior.
The firm can predict clients with the probability of churning.

4. Contributes to customer retention programs.
Helps in the identification of the causes of client churn.
Customer churn analysis refers to the customer attrition rate in
a company. This analysis helps SaaS companies identify the
cause of the churn and implement effective strategies for
retention. Gainsight understands the negative impact that churn
rate can have on company profits. Named as the "2014 cool
vendor for CRM sales" (by Gartner), Gainsight’s customer
intelligence and retention process automation technology:
Gathers available customer behavior, transactions,
demographics data and usage pattern
Converts structured and unstructured data/information into
meaningful insights
Utilizes these insights to predict customers who are likely to
churn
Identifies the causes for churn and works to resolve those issues
Engages with customers to foster relationships (Salloum, 2016)
Implements effective programs for customer retention
6
Effects of Customer Churn
In the event that the company experiences customer churn, it
will be affected in the following ways;
It hurts the company’s valuations.

5. Gives advantages to the exiting competitors.
Customer churn is an indication of bigger problems for the
company.
The eventualities of client churn are long-reaching for the
company.
The Aftermath of Churn is Long-Reaching
Some businesses think, “If a customer stays long enough to pay
for the cost of acquiring them, then we’ve operated at a net
profit.” This ignores all the value you’ve lost from future
opportunities with them. You’ve now lost the chance to upsell
them with other products or services in your portfolio. You’ve
reduced your total addressable market because those customers
have been removed from it. What’s more, your brand is now
likely tarnished in the minds of your spurned customer.
Churn Helps Your Competitors
Churned clients tend to be vocal about why they’ve left you.
Negative customer reviews are a gift to your competitors. As
positive customer references can often make or break a deal,
negative references act as powerful ammunition for your
competitors to position against your product. And your
competitors have no qualms about using them again and again
with new prospects (Hazen, 2014). Those churned customers
just may come back to prevent you from closing your next deal
and hitting your revenue goals.
High Customer Churn May Indicate Bigger Problems
Just like happy marriages don’t end in divorce, happy customers
rarely leave. High churn indicates that something is failing in
your customer relationships. Has your product or service failed
to deliver on client expectations? Does your customer
onboarding process need to be fixed? Are you devoting enough
attention to your clients? Even if a high churn rate is from

6. factors beyond your control, it reflects poorly on your company
and your product.
Churn Hurts Your Valuation
Churn rate is a critical factor in how investors view your
company. VC firms look at customer churn to determine if your
product has legs on the market, and retention rate is essential in
Software-as-a-Service (SaaS) public valuations. Smart SaaS
investors use Customer Lifetime Value (LTV) as a metric to
predict how much profit you will make and analyze the health
of a company. High churn rates reduce LTV and can make
investors doubt the strength of your business. So, if you’re
churning and burning your customers, you’re likely making
your investors pretty unhappy.
8
How Your Yore Blends can Identify Customer Churn Possibility
Decreasing number of support ticket
Negative reviews and increasing complaints
Reducing website activity
Not having many support tickets might sound like a good thing,
but it can suggest that customers are unengaged and have not
fully adopted the company’s product. You could assume they’re
a product genius who never needs help, but it’s more likely they
haven’t invested in the product and aren’t taking the time to
figure it out. Your product might be on the budget chopping

7. block next year.
Direct feedback, including negative reviews and social media
complaints, is one of the best indicators of company’s
customers' risk status. It's clear that these customers have a
problem with the product, service, or organization, and just
because they didn't explicitly mention leaving doesn't mean they
aren't thinking about it.
By using a tool like web tracking, the HR may be able to see
when customers view cancellation or downgrade pages – a clear
sign they’re interested in moving on from the company’s
product. (Hazen, 2014)
9
Churn Analysis in Yore Blends
Yore Blends should carry out churn analysis to avoid loosing its
clients.
This analysis will help the company to;
Measure churn rate
Monitor churn rate
Reduce churn rate
To prevent losing customers through customer attrition,
companies turn to churn analytics. This type of analytics helps
them measure, monitor and reduce the churn rate. The need for
customer churn analytics is one of the reasons clients turn to BI
implementation services. In this article, our BI experts
summarize the main benefits customer churn analysis can bring

8. and explain how to conduct it. (Hazen, 2014)
11
Appropriate Data Source for Churn Analytics
Company’s billing System
Portfolio of the company’s products
Customer profiling based on customer care services
Client’s sentiments on the company’s blogs and posts
Proposed Customer Calculations fo for Yore Blends
Calculating customer (=subscription) churn alone is not
informative enough for this company, as the percentage of all
customers who choose to cease the relationship with the
company does not reflect its impact on your bottom line. To
understand how customer churn affects the companys it is
necessary to calculate gross revenue churn (the percentage of
revenue that is lost during a targeted period) or employ more
complex calculating methods.
13
Considerations When Calculating Churn Rate
Sample size

9. Time frame
Customer segments
Seasonality
sample size
Early on and under conditions of hyper growth, calculated churn
rate is just as much a product of our small sample size as it is a
number that’s representative or predictive of how well the
company’s service retains customers. There is often little data
in terms of number of cohorts and how the cohorts behave over
time.
Under these conditions, it’s important to recognize the
limitations of the inferences you can draw from your churn rate.
Time frame
The company may be looking at customer churn over the period
of a week, month, quarter, or year. Also, they want their
calculation to be robust with respect to the timeframe chosen.
The company should avoid their calculation going from
generally correct to wildly incorrect when they move from a
monthly frame to a quarterly frame.
Customer segments
An aggregated number dissolves the differences between the
company's customers, and that can lead to a misunderstanding
of the churn number if it is just take it at face value. For
instance, growth in a higher churn customer segment could be
mistaken for increased churn overall, and that could lead down
the wrong path of trying to fix a non-existent churn problem.
Seasonality
If the business varies based on the season, the customer’s churn
may show changes that correspond with the seasonality of the
business that might be hard to understand until they gone
through several cycles.
14

10. Appropriate Churn Models
Identification of the best data:
The company must first obtain quality and substantive data for
accuracy of results.
Selection of Attributes:
The company’s analyst must select the best attribute from the
available ones.
Identification of the best data
Experience shows that the quality and suitability of the
available data determines the accuracy and predictive power of
the resulting model. Different data combinations may be better
or worse indicators for different problems and for different
areas of business. Ultimately, it is a question of identifying the
data that best fit the type of analysis being carried out. Only in
this manner could useful and usable knowledge (in business
terms) be extracted in subsequent stages of analysis. (Erl, 2016)
. Selection of Attributes
In this stage, the most appropriate attributes or features for
prediction must be selected from those available to the analyst,
which, in a supervised PR setting, which is the most common in
the literature of churn IDA, would be those that minimize the
classification or prediction error; in an unsupervised learning
setting, which might address churn analysis as a market
segmentation problem, would be those which best reflect the

11. grouping or cluster structure of the data. From a DM process
point of view, this stage would correspond to the phase of data
pre-processing. (Waller and Fawcett, 2013)
15
Identification of the Best Data
Selection of Attributes
Appropriate Churn Models
(Cont.)
Development of a predictable model :
The use of a model that extracts data patterns from the available
data.
In this case, regression analysis is the best model to be used by
the company.
Results validation:
Results can best be validated using the repeated random sub-
sampling technique.
Development of a predictable model
Computational Intelligence (CI) methods provide, in one form
or another, flexible information processing capabilities for
handling real life problems. Exploiting the tolerance for
imprecision, uncertainty, approximate reasoning and partial
truth in order to achieve tractability, robustness, low solution
cost and close resemblance with human-like decision making, is
the overall objective of CI methods.

12. Results validation
Cross-validation will be the most suitable in this cases in which
data is scarce. In its most simple version, a single split of the
data is generated (such as the 70/30 used in [46]; the 70% of
cases used as training set and the 30% remaining as validation
set). Cross-validation is based on the principle of using the
available data for both training and validation. (Erl, 2016)
18
Regression Analysis
Random Sub-Sampling Technique
Prevention of Client Value Attrition
This analysis involves more than just the prediction of customer
churn.
It gives access to prediction of clients with a declining lifetime
value
Gives the company an opportunity to increase revenue from
existing clients.
Optimove goes beyond simply predicting which customers will
abandon the business by providing early warnings regarding
customers whose lifetime value prediction has declined
substantially during the recent period, even though they are still
active and may not abandon the business entirely in the near
future. (Erl, 2016)
Optimove’s ability to identify customers which fall into this

13. “decliner” category helps marketers increase revenues from
existing customers, while simultaneously reducing the number
of customers who may fall into the risk-of-churn category.
21
How to Reduce Customer Churn
Analyze causes of churn
Engage with clients
Offer incentives
Communicating with the customers does miracles in analyzing
churn. The company needs to be actively using all channels for
that: phone, e-mail, website, live chat, and social media. The
valuable feedback on how well they serve their customers is just
a phone call, an e-mail or a survey away. Also, another way to
prevent churn is to actively engage the customers with the
product (Agarwal, 2014). The company should give its
customers reasons to keep coming back by showing them the
day-to-day value of using their products, by making their
products and services a part of their daily workflow. Lastly,
offering incentives and discount offers is widely regarded as the
most effective tactic in reducing churn.
22

14. Solution
to Customer Churn
Acquisition and aggregation of data
Data integration and analysis
Data interpretation
Phase 1: Data Acquisition and Aggregation
The first phase of this customer churn analytics engagement
revolved around combining data obtained from disparate
sources and customer touch points to identify customers with
the highest churn risk.
Phase 2: Data Integration and Analysis
The second phase focused on integrating and analyzing data
using advanced statistical models to generate comprehensive
insights that help predict churn & analyze factors leading to

15. customer churn. (Agarwal, 2014)
(Phase 3: Data Interpretation
In the third phase of this customer churn analytics engagement,
the company should focus on interpreting data & developing
corrective measures to reduce the business risk of existing
customers switching to its competitors’ network by
implementing innovative ways to improve the overall customer
experience
23
Conclusion
Yore Blends should identify possibilities of churn before it
happens.
Appropriate churn analysis will help the company reduce
chances of loosing clients.
The most appropriate analysis technique should be executed.
Failure to identify gaps will lead to decrease in company’s
revenue.
References

16. Agarwal, R., & Dhar, V. (2014). Big data, data science, and
analytics: The opportunity and challenge for IS research.
Waller, M. A., & Fawcett, S. E. (2013). Data science, predictive
analytics, and big data: a revolution that will transform supply
chain design and
Erl, T., Khattak, W., & Buhler, P. (2016). Big data
fundamentals: concepts, drivers & techniques. Prentice Hall
Press. management. Journal of Business Logistics, 34(2), 77-84.
References
Salloum, S., Dautov, R., Chen, X., Peng, P. X., & Huang, J. Z.
(2016). Big data analytics on Apache Spark. International
Journal of Data Science and Analytics, 1(3-4), 145-164.
Hazen, B. T., Boone, C. A., Ezell, J. D., & Jones-Farmer, L. A.
(2014). Data quality for data science, predictive analytics, and
big data in supply chain management: An introduction to the
problem and suggestions for research and
applications. International Journal of Production
Economics, 154, 72-80.

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