An e-commerce company is a prominent online retailer who offers a wide range of products to customer globally. To grow its customer base and potential long-term sustainability, it is necessary to find out the factor contributing to customer churn and obtain actionable insights ti improve customer retention strategies.

Identifying key factors leading to customer churn

Understand demographic and bahavioral characteristics of churned customers

Recommend potential campaigns to buy back the valued customers who churned

The dataset was obtained from Kaggle and contains 20 columns with 5630 records, regarding to information of users on e-commerce platform.

Link: https://www.kaggle.com/datasets/ankitverma2010/ecommerce-customer-churn-analysis-and-prediction?sort=most-comments

Demogaphic and Engagement characteristics:

Behavorial chracteristics:

The overall churn rate is 16.9%, which indicates a significant portion of customers leaving the platform

Single and male users are more likely to churn.

Customers who lived in City Tier 2 have higher churn rate compared to others.

Most of users have rated average satisfaction score at 3. Surprising, customers with score 5 are most likely to churn. This also shows that customers are satisfied with services and products, they still leave though. This is referred as involuntary churn.

Who registered complaint are 22.7% likely to leave.

Churned customers usually use Debit Card as method of payment.

Customers with one month stay are more likely to churn. The platform can offer incentives for new users at this point.

Fashion and Mobile Phone have the highest churn rate up to 18%, which may be resulted by dynamic trends in both categories associated price competition and after-service policies.

Customers who made 10th purchase in last month are 24% likely to churn.

Customers who used 9th coupon in last month are 33% likely to leave.

Customer Retention Programs: + New users: introduce special offers, discounts and loyalty point for new users to encourage them to stay longer. Moreover, develop recommendation system to personalize onboarding experience. + Current customers who are more likely to leave: develop campaigns or email with special offers for targeting users such as who have completed certain number of purchases (10th purchase) or specific number of coupons or customers who live in specific areas.

Responsive customer support: automated live chatbot can be integrated to ensure in-time and satisfactory response to complaint. Then, a follow-up system to check customer satisfaction post resolution. On the hand, the platform can create a customer feedback loop and conduct sentiment analysis to identify common issues and address them promptly to prevent churn.

Product and after-service optimization: within high-churn rate categories includes Fashion and Mobile Phone, the platform can consider to implement flexible return policies while ensure quality assurance and excellent after-sales service. to build trust and customer loyalty.