Customer churn is one of the most expensive problems in customer experience. And it’s well known that acquiring new customers costs significantly more than keeping the ones you already have. So how do you keep customers as your customers? You could experiment and make small improvements to see if you can improve retention and existing customer growth. But unless you’re identifying why customers churn – and what to do about it – this trial-and-error approach will take significant time and resources.
That’s where AI comes in.
Using AI to highlight patterns in customer interactions gives CX leaders the ability to reduce customer churn programmatically. By identifying the customer signals associated with churn in customer service interactions, brands can focus on the issues causing churn and specific individuals at risk of churn. Here’s how.
Why customer service conversations are a leading churn indicator
Most churn prediction models rely on lagging indicators – like whether a customer renewed or not. They then take factors associated with that customer or account and try to reverse engineer them to fit the story of why the customer churned.
But if this approach sounds backwards… It’s because it is. This method could take totally unrelated factors that are common to multiple churned customers and provide them as the root cause. It’s correlation, not causation.
But customer service interactions are quite literally the voice of your customer. It’s the customer’s perception of your experience in their own words. It’s also on their terms, not from a survey you triggered, a focus group, or other feedback mechanism. This makes customer conversations a great source of knowledge without the bias of those other methods.
Here’s how this works in practice.
Turn tough conversations into meaningful product feedback
When customers have a product issue, they don’t immediately call you. They try to figure it out as best they can. And only when they can’t, do they take time out of their day to wait in a queue, have a long chat, or wait multiple hours or days for an email response.
This is important because not all your customers have the time and patience for this. The customers who do contact you are representative of a larger, even more frustrated group that could even be at higher risk for churn. That’s why these conversations, while often tough, are important.
Surfacing product issues through your support channels can often be faster and more detailed than surveys. With proper discovery, this can highlight what exactly the issue is, pinpointing the root cause. Depending on the length of the interaction, customer conversations can have dozens (or even hundreds) of data points that can be used to recognize patterns that lead to churn. And these conversations can highlight new issues you haven’t seen before, making them a critical feedback loop for product launches as well.
For example, a food delivery platform using Loris found that premium customers who had even one negative support interaction dropped from a 100% to 91% reorder rate. That insight helped them refine agent training and reduce churn among high-value users.
Case Study: Predict & Prevent Customer Churn with AI
See how one of the top food ordering and delivery platforms predicts and prevents customer churn using AI and customer conversations.
Improve first support interactions and new customer experience
It costs a lot to acquire a customer. So when you do, you need to make sure their first experience with your support team reinforces the fact they’ve made the right decision.
But often, new customers get the same experience as everyone else. So what could be an opportunity to dazzle these new customers you just spent significant time and money to acquire ends up being the reason they churn. In the food delivery case study above, the brand found that new customers who had a poor initial support interaction were 75% less likely to reorder. But when the conversation went well? Repeat order rates quadrupled.
In addition to being a costly way to do business, this could also throw off your marketing spend and campaign reporting. Without understanding what’s happening when customers contact support, marketing could mistakenly assume that these were the wrong customers in the first place. This gap in insight could lead marketing to spend less on tactics that are actually seeing success.
Having insight into the issues impacting new customers can not only have an enormous impact on onboarding and retention, but also how you market to new customers. Establishing how the product works and who the product or service is for, based on who sees success and who struggles, makes it easier to attract the right customers who may be less likely to churn.
Use customer conversations to better understand and prioritize customer issues
Everyday, your customers tell you exactly what’s going wrong. They email, chat, and call you – you just need to listen. Using Loris, brands automatically identify the reason customers are reaching out, called Contact Drivers, as well as how the underlying issue was resolved, called the Root Cause. Having both the customer’s perception of the issue as well as the actual issue gives you a clear sense of where friction is impacting the customer experience.
But AI provides a level deeper than just the “why”. Each customer conversation can have dozens, or even hundreds, of data points. From customer sentiment during the interaction to products mentioned to critical issues like frustration or profanity, your conversations give you a clear map of your entire experience and the hot spots you need to address. Combining this conversation data with customer health, you can connect the dots between how customers feel about specific issues and whether those issues are leading to churn.
Final Thoughts
Reducing customer churn starts with understanding what’s driving it. After all, you can’t reduce customer churn if you’re always trying to solve problems after they escalate. Loris surfaces new and rising customer issues automatically—like when Calendly detected a sudden spike in tickets about a missing chat feature, hours after a UI update. They were able to act quickly, avoiding confusion and potential churn.
Loris gives CX teams the tools to connect the dots—across sentiment, issue type, conversation quality, and more—so you can act early and retain more customers.
Want to see how Loris can help you reduce customer churn? Request a demo.
