In a nutshell:
- Customer attrition from poor experiences costs US businesses trillions of dollars annually.
- Churn prediction software helps identify at-risk customers and prevent churn.
- Top software options include Pecan, Churnly, Qualtrics, KNIME Analytics, and ChurnZero.
- Look for easy-to-use interfaces, integrations, core features, and pricing in churn prediction software.
- Predictive analytics can improve customer retention and inform marketing strategies.
Did you know that customer attrition from poor customer experiences alone cost US businesses $3.1 trillion in 2022?
Let’s be real. After spending all those invaluable resources in strategizing, marketing, and selling, no business leader wants a leak in their ship through which customers slip away silently. However, as a seasoned mariner, you know that churn is inevitable — and prevalent — in every business regardless of its industry.
Therefore, the more important question is: Can you use data and analytics to predict which customers are most likely to leave so you may take the necessary steps to tackle churn head-on?
This article will help you understand why you must take a proactive approach to managing churn and give you a rundown of some of the best customer churn prediction software that can help. We’ll break down the features, benefits, pricing, integrations, and limitations of each and what you should look for in churn prediction software.
Why is customer churn prediction important?
Customers pausing their services, canceling ongoing subscriptions, or no longer purchasing from a business can all contribute to churn.
This cost includes the lost revenue from departing customers and the marketing cost of getting new customers to replace them. Often, it just so happens that the initial acquisition cost for a customer isn’t recovered by the amount they spend during the customer's lifetime. Also, of course, customer acquisition is far more expensive than retention.
Apart from the financial impact, churn can also negatively impact a company’s reputation. This aspect is often overlooked.
Customers dissatisfied with their experience with a business are more likely to tell others about it and share it online or in conversations with others. This, in turn, can deter potential customers from doing business with the company when they come across negative reviews about it. If that happens, it will also impact the customer acquisition budget.
That’s why it may be worthwhile to predict churn and prevent these customers from leaving, rather than trying to win them back once they have already left.
Preventing customer churn can significantly boost a business’s revenue, especially those with slim profit margins. A proactive approach will give you the time to develop new strategies to retain at-risk customers.
Throw good churn prediction software into your marketing and customer experience toolbox, and you will be able to understand why customers are leaving your company. For example, some of the most common reasons for churn are false promises about product performance (31%), product failures (23%), and data breaches (15%).
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- Reasons customers change products or suppliers
With this powerful data, it is easy to strategize and create effective customer retention campaigns to attack churn trends and improve retention rates.
For perspective, let’s look at a few more interesting churn statistics. The average churn rate in the SaaS industry is 13%.
The financial/credit and cable television industries have the highest customer churn rate (25%), followed by general retail (24%), online retail (22%), telecom/wireless (21%), and travel (18%).
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- Customer churn rates vary by industry
Predictive analytics can also provide important metrics about how well new products and updates are faring with customers.
For example, changes in churn rate after a product launch or a major software update can give you a good idea about customer satisfaction levels and why customers are satisfied or dissatisfied. This information can be used for future product updates, allowing you to redirect company funds to the right internal projects.
What is customer churn prediction software?
Churn prediction software is a complex analytics program that can analyze large amounts of data to predict customer churn. Simply calculating and tracking the churn rate (the number of customers that have abandoned the company over a time period divided by the total number of customers at the beginning of said period of time) is a reactive approach to customer retention.
Using churn prediction software is a proactive approach to customer retention — identifying and targeting customers at a higher risk of disengaging with the company and encouraging them to stay on as paying customers.
However, the main problem with this predictive approach is the vast amounts of data that need to be analyzed. Thankfully, churn prediction software can gather and analyze huge data sources such as transaction records, customer data, and customer behavior data, identifying trends and highlighting the reasons that can lead to future customer churn. Such software can pull data from various sources, including CRM applications, payment processing tools, sales software, and marketing tools.
All this data is fed into the predictive churn software's machine learning algorithms, allowing it to identify high-risk customer segments and churn patterns.
By getting an in-depth look at customer loyalty factors in your company, you can spend more time and effort on initiatives that help you retain customers. Churn software data can also be used to customize your solutions, messaging, customer relations, and marketing campaigns for different customer segments.
What to look for in customer churn prediction software
Churn prediction software gathers data from different sources, builds machine learning models, and furnishes predictions to the business user. Here’s what you should look for when choosing the right churn prediction software for your business.
- Easy-to-use interface. Predictive software is technically complex, and any good software should have an intuitive interface with easy-to-find and self-explanatory sections that require no coding experience from its users. It should also give the results in an easily understandable format that users are looking for.
- Integration and scalability. The churn prediction software must integrate easily with other business programs in your company so that it can source data. It should also feed predictions into other software used to manage customer interactions, such as your CRM or marketing automation systems. As your customer base grows and more information is stored, the churn software should be able to scale up to handle the increased load with minimal intervention.
- Core features. The basic functions of good churn predictive software are data collection, data preparation, model preparation and deployment, and model monitoring.
- Pricing. For small businesses, it’s best to use software that offers just the core functions. It is also advisable to ask for demos and sign up for free trials before choosing. Churn prediction software such as Pecan provides many additional features and basic core functionalities for a reasonable price.
Top 10 customer churn prediction software
Now that we’ve covered the basics, here’s a list of the best churn prediction software options. These will help you understand and monitor customer behavior, generate more customer engagement, lower churn, and improve customer retention.
Churn Prediction Software Option #1: Pecan AI
Why Pecan
Pecan is a powerful predictive analytics and churn prediction tool. You can integrate it with other tools to source data or even upload CSV files, and Pecan will prepare the data for use by its predictive AI models.
Models can be built rapidly so you can get proactive about reducing churn in just a few weeks. For example, the wellness brand Hydrant used Pecan’s solution to analyze large amounts of historical purchase data, and the churn model was built in just two weeks. Pecan also helped Hydrant segment customers based on churn predictions, so each group received tailored marketing messaging.
Integrations
It can be seamlessly integrated with over 15 databases, CRM, and analytics software such as Amazon Redshift, Salesforce, and Snowflake.
Pricing
You can choose from one of its three payment plans starting at $50 per month.
What it’s great at
- Highly scalable — can be used by small businesses as well as Fortune 500 companies
- Predictive Chat can suggest a predictive question and customize a model accordingly
- Analysis and prediction results are provided in a simple format for stakeholders
- Churn can be predicted for different periods, such as after 30, 45, and 180 days
- Free trial versions are available
Areas of limitation
- Limited integrations with some database and data warehousing tools
Churn Prediction Software Option #2: Churnly
Why Churnly
Churnly is an AI-powered tool geared towards SaaS companies in the B2B sector. It’s best used for risk analysis, revenue tracking, customer lifecycle monitoring, and customer retention.
Integrations
It can integrate with a limited range of software such as Hubspot, Zendesk, Zoho, and Stripe.
Pricing
Their pricing isn’t disclosed on the website; you’ll have to contact their team for more information.
What it’s great at
- Provides account alerts
- Onboarding
- Customer engagement
- Offers mobile support
Areas of limitation
- Desktop app supports only Windows OS
- Only email customer support is available
- No free trial or free version
Churn Prediction Software Option #3: Qualtrics
Why Qualtrics
Qualtrics focuses mainly on customer engagement. Apart from providing a range of customer metrics, it identifies customers at high risk of churn and allows users to take immediate action. It has a net promoter score feature that collects and rates customer feedback to track product improvement.
Integrations
It easily integrates business management and analytics tools such as Salesforce, Tableau, Slack, and Trello.
Pricing
Their pricing isn’t disclosed on the website; you’ll have to contact their team for more information.
What it’s great at
- Supports Mac and Windows OS
- Support is available in eight languages, including Chinese, Italian, and Japanese
- Customer support is available over email, phone, and tickets
- Live support and training materials are provided
Areas of limitation
- No free trial is available
- Only the cloud-based version is available
Churn Prediction Software Option #4: KNIME Analytics
Why KNIME Analytics
This is a predictive analysis software that small businesses and large enterprises can use. KNIME Analytics uses machine learning, AI, and data blending to provide churn analyses.
Integrations
It integrates with Apache Spark for Big Data, R and Python for scripting, H2O for machine learning, Keras for deep learning, Google Drive, Azure, etc.
Pricing
Their pricing isn’t disclosed on the website; you’ll have to contact their team for more information.
What it’s great at
- Supports Mac and Windows OS
- Requires no coding
- It can deploy machine learning models, blend data, and provide visualizations
Areas of limitation
- No free trial is available
- Limited customer support (email only, but training materials are available)
Churn Prediction Software Option #5: ChurnZero
Why ChurnZero
ChurnZero is another customer success application that offers good churn risk identification features. You can integrate this software with many financial and CRM apps. Based on its risk analysis, it can trigger alerts to boost customer engagement and reduce churn by targeting customers it predicts will not renew with the business.
Integrations
Integrates with Salesforce, HubSpot, NetSuite, Zoho CRM, Chargebee, Stripe, etc.
Pricing
Their pricing isn’t disclosed on the website; you’ll have to contact their team for more information.
What it’s great at
- Generates scores to trigger actions to improve customer engagement
- Allows you to create surveys that can be sent throughout the customer lifecycle to understand customer sentiment
Areas of limitation
- No free trial available
- Limited data analysis features related to churn
Churn Prediction Software Option #6: Zendesk
Why Zendesk
This customer relationship management tool combines the various ways customers reach out to a business (social media, live chat, email, etc.) into one platform. This allows for better tracking of customer issues and improves customer satisfaction.
Integrations
Integrates with several apps across a variety of categories like CRM, project management, productivity, workflows, messaging, etc.
Pricing
Zendesk is available in seven different price tiers, starting from $19 per agent per month.
What it’s great at
- Supports Mac and Windows OS
- Support is available in 14 languages, including Turkish, Swedish, and Korean
- Customer support is available over email, phone, and tickets
- Live support and training materials are provided
Areas of limitation
- The major drawback is that it has very limited churn analysis, as it is intended primarily to be a CRM system or helpdesk software
Churn Prediction Software Option #7: Alteryx
Why Alteryx
Alteryx offers reports, insights, dashboards, metrics, and analytics. This software focuses on data — from data management and warehousing to predictive and ad-hoc analysis. Some of its key features include data mining, online analytical processing, data visualization, templates, model training, and filtered views.
Integrations
Integrates with data stacks like AWS, Snowflake, Google Cloud, Databricks, etc.
Pricing
The Alteryx Designer Cloud product starts at $4,950 per user per year. For more information, you must contact their team.
What it’s great at
- Focuses mainly on data analysis
- Drag and drop options are available for analytics features, making it easy to use
- Support is available in eight languages, including Chinese, Italian, and Japanese
- Ad-hoc analysis and reports
Areas of limitation
- No free trial available
- The desktop version supports only Windows OS
- Only a few data visualization features
- Requires users to have prior technical knowledge
- Machine learning capabilities require either coding knowledge or a paid add-on service
Churn Prediction Software Option #8: Vitally
Why Vitally
Vitally is a tool that aims to create a collaborative work environment and has both project management and customer insights features. It tracks customer interactions over different platforms and provides reports and data alerts, which can be used for live-tracking customer behavior.
Integrations
Integration is possible with a few tools such as Outlook, Zendesk, and Stripe.
Pricing
Their pricing isn’t disclosed on the website; you’ll have to contact their team for more information.
What it’s great at
- Data alerts
- Features to connect Customer Success teams with customers
Areas of limitation
- No free trial available
- The software focuses more on project management with automated workflow, notes, and collaboration features
Churn Prediction Software Option #9: Baremetrics
Why Baremetrics
With its churn analysis and prediction features, Baremetrics can help inform resource allocation decisions. In addition to churn forecasts, the software tracks customer success indicators like cancellations, downgrades, and upgrades in one location.
Integrations
Integrates with payment or subscription platforms like Shopify, Clover, PayPal, Square, WooCommerce, etc.
Pricing
The software's cost is based on a business’s monthly recurring revenue (MRR). You can add more modules by paying more: Metrics costs $208/month, Recover costs $158/month, and Cancellation Insights costs $108/month.
What it’s great at
- 14-day free trial available
- Analyses historical data for better revenue estimates
- Allows you to create personalized emails to follow up with customers
- Provides insight into customer cancellation
Areas of limitation
- Requires spending more to add data analysis and additional features
Churn Prediction Software Option #10: Gainsight
Why Gainsight
Unlike some of the products in this list, Gainsight integrates with 60 other business applications. It has been designed to improve customer success and is best used for customer feedback and revenue optimization operations.
Integrations
It integrates with a variety of applications, such as Slack, Snowflake, Mixpanel, ServiceNow, Jira, Zoho, HubSpot, etc.
Pricing
You can choose from three different pricing plans based on your business needs.
What it’s great at
- AI-powered customer insights
- Provides health scores for better customer engagement monitoring
Areas of limitation
- No free trial available
- Geared more towards customer management than predictive analysis
Churn prediction software for the win
If you want to retain as many customers as possible, there are two things you need to be able to do: predict churn and understand what marketing strategies will work best to prevent customers from disengaging.
Churn prediction software such as Pecan offers powerful data analysis, artificial intelligence, and modeling capabilities to analyze churn and provide accurate predictions. If you want to start predicting immediately and learn more about Pecan’s customized predictive models, sign up for a free trial today, or let us give you a guided tour.
