ducks paddling with feet visible underwater
Editorial

How to Understand Customer Churn When There Is No Return

4 minute read
Ken Peterson avatar
Is a one-time visitor valuable?

Many years ago, a colleague, a client and I were walking through the central area of Brussels trying to decide where to eat. The hosts at every restaurant we passed called out to us, saying almost anything to get us in the door. Their salesmanship was relentless. In those pre-online review days, we only had their word on the value of the restaurant.

Today I live in a city known for its visitors. And many of the restaurants still have the same need: to get as many visitors in the door as they can. I ate at one of those restaurants that cater mostly to tourists and was quite disappointed. Once we were seated there was a lack of attention, we received the wrong food order and heard no apologies for any errors.

This restaurant, like the ones in Brussels from several years ago, already had what it wanted: a paying customer. The next challenge? Refill that seat as fast as possible. Again and again and again. It didn’t matter if the person returned. In fact, most staff expected that the customers they were serving would never be seen again. And before the internet, word of mouth didn’t travel well with the tourism set. But now, thanks to online review sites, it’s a whole new ballgame.

So how would one consider churn when the expectation is you only see the customer once based on how your business is set up? Clearly, if a restaurant (or any other business) had 100% churn, they wouldn’t promote that in their marketing, even if it was the expected metric. 

How can you make decisions on what is good for the business — and ultimately customer recommendations — when you don’t expect to ever see that customer again?  

Building Relationships Is Still Important

In today’s interconnected world, any experience can be broadcast to a large audience through online reviews. Particularly when it comes to visiting new places, those reviews bring great value to the next visit even if it doesn't help the current customer. Even utilizing closed-loop customer feedback from a customer experience survey could help eliminate what could ultimately turn into a bad online review.  

First, the challenge of getting feedback is important. That is part of the very foundation of the Net Promoter Score (NPS)+: One question, one open-end comment, and one more click for the root cause. From that, we can understand how we are doing, quantitatively see the root cause and understand the feelings behind the individual scores.

Learning Opportunities

However, there is one more key element that can be analyzed from this approach.

Related Article: Understanding the 'Why' Behind Customer Churn

Comprehending the Churn Risk Metric Can Help Your Business 

In getting that feedback, there will certainly be some balance of promoters, passives and detractors. However, while they will all churn in such a business, the understanding of a churn risk measurement might help a one-and-done business attract more customers. Certainly having promoters using promoter amplification tools can help get some positive reviews into the marketing arena.

There will also be some unrecoverable bad experiences that will make their way into others’ screens when considering their options. It is those passive responses that can make the difference between being a four-star reviewed business or a two-star reviewed business. Some churn risk measurement tools will gauge if a passive customer has some of the characteristics that look more like a detractor and can allow a brand to make decisions, both about fixing key concerns and working on customer recovery to avoid that bad review.

By understanding the churn risk, a brand can still help push better social reviews and keep their business profitable — all while having a near 100% churn.

About the author

Ken Peterson

Ken Peterson, President of CX at QuestionPro, has over two decades of experience in the marketing research, retail, technology, hospitality and transportation industries with a recent focus on financially linked business insights, SaaS deployments and CX consultation. This ties in with his long history of P&L responsibility and detailed understanding of improving business operations.