Losing customers is a natural part of business, but proactively identifying those at risk of leaving – what we call ‘churn’ – is crucial for sustainable growth. It’s far more cost-effective to keep an existing customer than to acquire a new one, especially as competition heats up. We’ve seen Australian SMEs consistently improve retention rates by focusing on early warning signals.

So, how do you pinpoint these at-risk customers? It’s about looking beyond simple sales figures and digging into behavioural data. Here are a few key areas to analyse:

• Declining Engagement: This is often the first sign. Are customers opening fewer emails? Visiting your website less often? Using your product or service less frequently? A drop in these metrics suggests disengagement and potential dissatisfaction.
• Reduced Purchase Frequency/Value: A customer who consistently bought weekly is now purchasing monthly, or their average order value has decreased significantly. This indicates a shift in their behaviour that warrants investigation.
• Negative Feedback & Support Interactions: Pay close attention to customer service interactions. An increase in complaints, negative reviews, or frustrated support requests are clear red flags. Sentiment analysis tools can help automate this process.
• Changes in Customer Profile Data: Have there been changes to their business size, industry, or key contacts? These shifts can indicate changing needs that you may no longer be meeting.

We recommend implementing a customer health score. This is a single metric, built from the indicators above, that gives you a quick overview of each customer’s risk level. Segmenting customers based on their health score allows you to tailor interventions. For example, high-risk customers might receive a proactive phone call from your account management team, while medium-risk customers could be targeted with a special offer or helpful content.

Don’t wait for customers to tell you they’re leaving. By actively monitoring these signals and taking preventative action, you can significantly improve your customer retention and build a more resilient business. The first step is to audit your current data sources and identify what information you already have available to build a basic customer health score.