Why Is Proactive Customer Retention Indispensable in 2022?


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The abundance of information and availability of choices have enabled customers so much today. A lot has changed in terms of their expectations since the COVID-19 disrupted the normal way of doing business. Today in 2022, even as the world gradually returns to the pre-COVID mode, these expectations are unlikely to change.

In such a demanding market, customer service will be a key differentiator. Businesses looking to adjust to the new normal and outdo the competition will have to meet with the changed customer expectations to stay ahead continuously. For that, they’ll need to detect customer pain points and resolve them proactively even before the customers pick up the phone to express them. In that sense, customer engagement that is proactive in nature doesn’t look optional in 2022 and possibly beyond.

A proactive retention model involves continuous tracking of churn risks signals for every customer right since an early lifecycle stage and identifying customers who are more likely to cancel and why – long before they actually decide to cancel.

Here are six reasons why proactive retention is indispensable if recurring revenue businesses want to grow in 2022 and beyond:

1.Customers may not call before canceling.

Customers do not call and inform the company before canceling in many cases. They simply stop paying and switch to some other service provider. Even if they call to cancel, it’s often too late to retain them. The decision to cancel is an outcome of accumulated negative experiences across the customer lifecycle, which is difficult and expensive to revert

2.A negative word of mouth may already be out.

Before or instead of expressing their concerns, many dissatisfied customers may have shared their poor experiences in their network. Since customer reviews are a strong determiner in a purchase decision, you may have already lost many prospective customers if you aren’t haven’t considered and planned for this in advance.

3.Proactive approach helps in identifying unengaged customers.

Customers who are not actively engaged with a company are more likely not to renew in the next cycle than those who are engaged. Unengaged customers have to put more effort into getting what they want. They are also less likely to communicate this, which only augments negative experiences for them and creates a negative perception about your brand. You can minimize this with proactive outreach and engagement. A Frost and Sullivan’s research study found 87% of customers have a positive image of companies when they follow up with them regularly.

4.Proactive retention allows broader visibility of at-risk segments.

A survey-based retention model only captures responses from a sample of the overall customer base, which doesn’t reveal an accurate picture of churn risk. On the other hand, with a proactive strategy, you can assign predictive risk scores to every customer in the database and get richer, real-time visibility of customers who are likely to cancel.

5.Proactive retention is an opportunity for value enhancement.

You can use the proactive outreach to assure customers of making the right purchase decision with you while educating them on how to use the product optimally and get the best value out of it. Therefore, besides protecting customer revenue, this approach offers you an opportunity to enhance value delivery, increase profits and nurture customer relationships. However, it’s important to remember that respecting their time and privacy is paramount here.

6.Being proactive is more cost-effective than being reactive

Retention can be expensive and less effective at the end of the term or when a customer calls to cancel the subscription. The risk is low in the early stages in the customer lifecycle during general, inquiry-related interactions. Therefore, compared to expensive last-minute offers, proactive personalized campaigns deliver better ROI and loyalty scores.

Brinks Home, a leading home security provider in North America, has phenomenal success by switching focus to proactive customer retention. We have created a case study that sheds more light on how Brinks Home created over $100 million in customer lifetime value (CLV) customer retention interventions.

This blog Originally published at VOZIQ AI Blog

Image credits: Adobe

Raviteja Sidda
Raviteja is Digital Marketing Manger at VOZIQ AI. VOZIQ AI is the only cloud-based predictive retention solution that leverages sophisticated AI that is powered by 10+ targeted machine learning models to enable recurring revenue businesses to predict customers who are at-risk of cancellation and prevent the cancellation by driving large-scale actions through contact center customer care, marketing and field channels. VOZIQ AI’s solution significantly cuts time-to-value in industries such as home security and automation, pest control, home warranty, energy providers, telecom, and insurance.


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