We have a problem. The number of accounts we are losing through attrition is greater than the number of new accounts we are booking. Is there a way we can design a strategy to improve this ratio? Our marketing department is doing all it can and we selected a strategy that reduces the customer complaint factor. Is there anything else you can suggest we implement?
Thanks for your kind assistance.
I’m sorry to hear that your customers are breaking up with you. The bad news is that there are a number of things that affect attrition rates….and the good news is that there are a number of things that affect attrition rates! So you can test a few different theories at once….
First, customer complaints will be helpful in a few cases, but not overall. When a customer is really unhappy with your pricing or product features, they will just leave. They are not going to waste time complaining first! Sort of like the girlfriend who is so unhappy that she will not even start a fight, instead she just silently gets up and walks out.
Questions to ask: Has your marketing group changed the product features? Have your competitors upped their game? How does your product compare to competing products? Have you tried calling your own customer service hotline to find out exactly how dreadful your service is?
What are you doing in your credit authorization strategies? If things are set too tight and you are turning down transactions on good customers, you might as well invite them to close their accounts! Nowadays, with widespread fraud you should also look at your false positive rates and work out how many good transactions are being delayed in the attempt to identify fraudulent ones.
What about your collectors? Are they calling customers five days past due and treating them like they will be coming after them with baseball bats? If your collection tactics are too agressive, you may be collecting more than just overdue payments, you may be collecting unhappy customers!
Have a friendly chat with your customer service department and find out if they have noticed any patterns in their calls. Drop into to see your collections team and ask them about their strategies for early stage delinquency. Then take a walk around town and look at the competitors’ products and wonder… which product would you choose?
If none of that works, maybe try some relationship counseling with your customers – you never know what you might learn!
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