Reducing Customer Attrition With Survey Research

Reducing Customer Attrition With Survey Research

All businesses deal with some degree of customer attrition, even long-established ones that hold high consumer loyalty. This includes prominent brands like Apple, Nike and the Home Depot. 

Given that even these major brands contend with lost customers, startups and younger businesses ought to pay attention to their own customer attrition and work towards lowering at whenever possible. 

Attrition is a serious consequence for businesses, as American companies lose 23% to 30% of their customers each year from a lack of customer loyalty alone. 

50% of customers naturally churn every 5 years. While this statistic may not seem as severe as the prior, only 1 out of 26 unhappy customers complain to a business; the rest simply churn. This is a grave detriment to businesses, as it averts them from finding the root cause of their attrition.

This article examines customer attrition, its two main types, why customers churn, how to avoid it and how survey research helps reduce attrition.

Understanding Customer Attrition

Also called customer churn, customer turnover, customer cancellation and customer defection, this phenomenon deals with the loss of customers from a business, especially the kind in which customers never return to a business they had frequently or occasionally patronized. 

Businesses can acquaint themselves with their customer attrition, by calculating their customer churn rate, a financial metric that measures the percentage of customers churning within a certain time frame. 

Most customers do not remain active customers permanently; there are several reasons behind this. Some of these reasons are preventable, as they occur due to issues that a business itself causes, whether it is a poor product, experience or lagging behind competitors.

Other reasons for customer turnover spring purely from the customers, such as a life event that greatly reduces their purchasing power, such as the loss of employment, or a lack of interest in patronizing certain niches.  

As such, whether a customer makes a one-time purchase or is a loyal customer of many years, every customer will eventually cease their relationship with a business.

The Two Main Types of Customer Attrition

There are two main types of customer defection that businesses should consider to be able to distinguish among the kinds that occur to their customers. These two are known as active and passive attrition. 

Active Attrition 

This is typically associated with subscription-based business models, the kinds that are commonly used in the Internet, publishing and telecom industries. As such, it refers to customers who cancel their subscription to a phone line, magazine or newspaper. It also involves the cancellation of digital services, such as app, data, streaming and SaaS service.

Passive Attrition

On the other hand, there’s passive attrition, which simply occurs when a customer stops transacting with a business, even if it is to make one-off purchases. This kind of attrition is predominantly associated with physical retail stores, e-commerce websites, on-request service providers and others.

Typical Reasons Behind Customer Attrition

Customers can churn for whatever reason they like, especially one-time shoppers, who may not have paid attention to the brand or store they bought from when they made an emergency or rushed purchase. 

Then there are the more conscious and personal causes as to why customers end their business relationship. The following lists the typical reasons behind churning customers, including consciously and unconsciously-made decisions :

  1. Poor service
    1. This involves customer service and support, along business services on offer
  2. Lack of a personalized service and experience
    1. Marketing personalization is a must, as greeting signed-in customers by their names is insufficient. Personalization allows customers to feel as though they are not being marketed to.
  3. Cost / value breakdown
    1. Customers may find certain price points disagreeable and switch to competitors.
    2. Customers may not feel prices are commensurate with the value of company offerings.
  4. Lost customers (contact information outdated)
    1. Some customers change their contact information without updating it across company databases.  
  5. Competitor superiority
    1. Competitors can outshine a business when they offer innovation, better products and services, personalization, lower prices or a number of other offerings.
  6. No longer in the market (doesn’t need)
    1. Customers don’t require buying the same things regularly when the need for it  runs out. 
  7. Customers cannot reach goals
    1. This occurs with digital experiences, for example, a website with a poorly working search function or the products themselves,

Avoiding Customer Attrition

There are various strategies that businesses can use to ward off customer attrition, including mapping out plans via a strategic planning process

Firstly, businesses should hone in on their customer acquisition, making it more targeted so that new customers are better-suited for retention. One of the major mistakes businesses make in acquiring new customers is netting those who are not the best fit for the company.

Some efforts to gain new customers yield the wrong kinds, such as those with loss-leader offers or those from a particular channel. To avoid bringing in the wrong customers, businesses should hyper-target their customers via market segmentation and forming customer personas. At times, it is going to be reasonable to spend more to target customers who will bring a long business relationship, including those with a higher customer lifetime value (CLV).

Next, businesses ought to improve their business offerings, whether it is a product, several products, a service or an experience. All of these tie into a business’s performance and factor into customer retention and loyalty. Brands must improve their customer loyalty, as it is the primary driver of retention — the polar opposite of customer attrition. 

In order to improve in all of these areas, businesses need to assess their current products, services and experiences. They should consider the following: does their business hit or miss the mark when it comes to their products and services? Does their business provide useful and positive customer experiences? After considering these questions and others, they should work towards innovation and improvement, which they can later promote. 

Brands must augment their marketing strategy, making their marketing efforts more personalized and up-to-date. If not, their competitors surely will. Many businesses already use a next generation approach to appeal to their target market. For example, Glasses USA offers a virtual try-on of their products and Patagonia takes part in sustainability and green marketing, a tactic that resonates with its customers. 

Finally, businesses can cut the effect of customer attrition by predicting it. They can achieve this by implementing predictive behavior modeling, a practice that helps companies predict the future behavior of their customers. This allows marketers to improve on the effectiveness of their marketing efforts. 

How to Reduce Customer Attrition with Survey Research

Survey research goes a long way towards reducing customer attrition. This is because in order to avoid churn, businesses must satisfy and delight their customers. In order to do this, they must know their customers’ needs, desires, aversions, opinions, sentiments and more.

The more intimately a business is acquainted with its target market, the better it can cater to it. After all, how can a business, or anyone, know how to serve and market to customers without knowing their preferences, sensitivities and wants

Survey research uncloaks the unknown when it comes to customers, as surveys allow market researchers to study virtually any topic concerning their business and customers. In this way, innovating new product features, and marketing certain messages will no longer be a mystery for brands. 

When it comes to customer attrition specifically, brands can set up their surveys to study what drives customers away, along with what they look for in a variety of matters. For example, businesses can study customer aversions by surveying them on specific product features, prices, sales, cultural trends and current events.

As for the latter, brands can observe which marketing ads, images, offers and promotions customers crave the most through surveys. Businesses can set up scaled questions and matrix questions so that customers can rate their necessities and desired items. With this information in tow, businesses can make informed and data-backed decisions, the kind that have a far greater impact on reducing customer attrition.

Retaining Customers for the Long Term 

Given the oftentimes staggering customer attrition rates, businesses should work towards strategies to reduce their own customer churn. While there are many tactics that businesses can employ to cut their customer turnover, using an online survey platform is the most proactive way to do so.

By studying all the wants, needs, opinions and aversions of their customers, businesses can avoid ensuing marketing faux pas, product blunders and other snafus that drive their customers away. The key is to use the proper online survey platform.

A strong online survey platform provides artificial intelligence and machine learning that disqualifies questionable users (such as VPNs, respondents that don’t pay attention) offers a wide range of filtering data options, engages users in their natural digital environments via random device engagement (RDE) sampling and much more. 

A business that uses an online survey platform with these capabilities and more is well-equipped to stave off customer attrition and retain more customers.

How to Avoid Survey Attrition and Keep Sought-After Respondents

How to Avoid Survey Attrition and Keep Sought-After Respondents

Survey attrition affects many research projects, whether they deal with market research or other varieties. A detriment to survey research, attrition creates a challenge that concerns retaining sought-after survey respondents, the kinds that provide the most value for your study.

As such, researchers ought to understand survey attrition, where and how it occurs, along with heeding best practices to weed it out. This will ensure that they form effective survey studies for valuable research.

This article expounds on survey attrition in its dominant forms, in addition to the methods researchers should adopt to reduce and avoid it altogether.

Defining Survey Attrition

Attrition is a term denoting the weakening or tearing away of something through sustained means. In survey and market research, the latter part of the definition usually occurs inadvertently, as no researcher would purposefully want to debilitate their research campaigns. 

In more specific terms, survey attrition involves the decrease of the sample size, number, or strength and can occur intermittently or permanently.

Survey attrition occurs through several adverse phenomena, since in simple terms, it refers to the act of leaving a survey study.  As such, there is no single form of survey attrition; however, survey attrition has typically focused on two kinds of attrition.

The Two Main Types of Survey Attrition

Although plenty of factors can fuel attrition, as most researchers have experienced survey respondents leaving a survey study, there are two main categories of survey attrition. As such, survey attrition research is committed to understanding these two predominant forms, along with the methods to increase participation.

Nonresponse Attrition

Also called nonusage attrition, nonresponse attrition refers to when those invited to complete a survey opt out of participating, thus rendering the loss of these respondents. This form of attrition occurs within systems that involve researchers reaching out to respondents and recruiting them, such as in survey panels and focus groups. 

Another form of nonresponse attrition is more difficult to tract; it involves those who were reached via automated survey means. Since these users never entered the survey by the nature of nonresponse attrition, they are virtually impossible to monitor. 

Dropout Attrition

Dropout attrition refers to respondents who have already begun a survey and dropped out, as the name suggests. This attrition can occur in any kind of survey distribution method, from targeted outreach such as emails and survey panels, along with automated surveys and prompts on landing pages, etc.

This kind of attrition can be tracked through certain online survey platforms, although not all will offer this capability. Often, studying dropout attrition involves studying the completion rate.

How to Avoid Non-Response Attrition

Researchers should bear in mind that there are going to be targeted members of your survey research that won’t even open your survey. There are, however, several practices that can reduce non-response attrition. Here are a few examples:

  1. Create highly targeted surveys. Solicit respondents via a survey that somehow relates to respondents or their market segment. No one likes receiving junk mail or being spammed with survey requests. 
  2. Reach those who interacted with a CX you can confirm. Ex: a purchase, a browsing session with no conversions (usually can be tracked with signed-in users), a phone interaction, etc.
    1. This will stamp out the feeling of randomness, so that the respondent doesn’t feel they are randomly selected, i.e., being spammed.
  3. Use incentives. Survey incentives grant respondents with a motivation to spend time out of their busy schedules on a survey.
  4. Don’t over-survey. Even if a respondent has taken part in a survey, there is no guarantee they won’t ignore a second request (or others). If you need to follow up, consider using other individuals in your target market.
  5. Be upfront with the purpose and the survey’s importance. Respondents should not feel they are randomly selected — or that they’re selected for something of little importance. Thus, make the purpose of the survey clear, highlighting its need and usefulness, for example, to improve their customer experience. 
  6. Display the time required to take the survey.  For transparency, make the estimated completion time clear so respondents will know if they are able to take it based on the time they have.  
  7. Consider instances most relevant to the target population. Send the surveys around those instances. Certain market segments have key dates that you can base your surveys around. For example, if you are looking to conduct a real estate survey and your target market is college grads, send the survey around graduation time, when the grads move out of their dorms and into their post-college life. 

How to Avoid Dropout Attrition

Avoiding dropout attrition involves optimizing the in-survey experience, i.e., the survey itself. Researchers can encourage respondents to complete their survey in a number of ways.  Here are a few critical methods to avoid dropout attrition.

    1. Keep survey size commensurate with the survey incentive. If you’re not granting any incentives for taking the survey, keep your surveys short, at no more than 5 questions. However, if you provide incentives, then the survey length should be proportional to the incentives. If a survey takes longer than 10 minutes to complete, consider offering a more substantial incentive.
    2. Optimize it across devices. We are no longer living in a digital-only, i.e., desktop-only world. Instead, many devices are used on the go like mobile phones and tablets. Assure that your survey can be easily seen, accessed and used across all devices. This includes checking for loading times, for content fits on the screen and no points of friction. 
    3. Keep questions on-topic. Irrelevant surveys or surveys that seem to veer from the topic they initially presented the respondents with, will easily deter the respondents from completing the surveys. These stir up confusion, boredom and sometimes, even stress. 
    4. Customize follow-up questions. Each respondent answers differently; as such not all respondents should be taken to the same questions. Instead, route respondents to questions based on the answers they provided via advanced skip logic.
    5. Avoid ambiguity in your questions. If they have to overthink a question or feel as though they’re unable to answer it, chances are, the respondents won’t complete the survey. Assure you provide all possible answers in your multiple-choice questions. If this is not practical, include an option for “other,” and allow it to be open-ended.
    6. Create engaging experiences with multi-media. These elements include photos, videos, GIFs and the like. Aside from embellishing the questionnaire, they create engaging experiences that stimulate your respondents beyond a text-only survey.
    7. Check your completion rates. Check your completion rate regularly. These should be available in the online survey platform you use for your survey campaigns. 

Maintaining a Steady Flow of Survey Participation

Since survey attrition cannot be fully avoided, so researchers ought to maintain steady response and completion rates. Additionally, they ought to keep optimizing their surveys, so that they are providing both the respondents and the researchers a smooth, glitch-free experience. 

Aside from the technical function of the survey, its success largely hinges on its questionnaire, which should always be kept relevant to the sampling pool. As such, market segmentation comes into play. As a marketer or market researcher, you ought to be in tune with the makeup of your target market — or target population if you are a general researcher.

This requires conducting preliminary market research. A potent online survey tool will help you achieve this with no hassle, allowing you to retain your most sought-after responders.

Frequently asked questions

What is survey attrition?

Survey attrition refers to a decrease in sample size or the survey strength. This happens when respondents can't complete a survey or drop out permanently from participating in a survey.

What are the two types of survey attrition?

These include non-response attrition and dropout attrition. Non-response attrition refers to participants that are unwilling or unable to complete a survey, thus rendering a loss of survey participants. And dropout attrition involves participants who are in the middle of a survey and then leave it halfway.

How can you reduce non-response attrition?

There are several ways to reduce non-response attrition that includes using incentives to encourage customers to complete the survey. Also, creating highly targeted surveys for different respondents can ensure that their time is not wasted.

What causes dropout attrition, and how can you reduce it?

Dropout attrition is when respondents exit the survey in the middle due to an obstacle. These obstacles could be lengthy or ambiguous questions, the lack of survey optimization across various devices, etc. To avoid dropout attrition, ensure your survey is optimized for mobile devices and keep questions concise. Creating an engaging survey with multimedia can also increase their interest, motivating them to complete the survey.

How can you maintain a steady flow of participation?

Survey attrition cannot be avoided entirely; therefore, from their end, you should strive to maintain steady completion and response rates. In addition, keep optimizing your surveys for any technical glitches so the survey experience is smooth for your respondents.