Case Study: Automotive - Customer Churn

Customer Churn Analysis for a Large Automobile Manufacturer in the US

The Business Challenge/Situation

The research was conceptualized to understand the Churn Drivers and factors influencing defection within the Manufacturers customer base. The Objective of the study was to conduct a Churn Analysis to successfully detect the underlying churn drivers and build enduring loyalty and retention.

Approximately 300,000 transactional data over 3 years was provided including the following information:

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• Transaction Type


• Previous Vehicle info


• New Vehicle Info


• Demographics


• Psychographics


• Financing details


• New vehicle Addition or Replacement


• Repair History/Warranty data


• Programs Incentives at time of purchase


• Customer satisfaction index from Survey conducted previously

Market Equations Role

Analyze data to identify the drivers of Customer Loyalty, Conquest and Defection and address the following questions:

• Why are customers staying?


• Why are customers leaving?


• Why are new customers coming?


In addition:


• Are there any demographic patterns or trends?


• What is the impact of incentives on the market?


• Is it different by customer segment? Model segment?

Various proprietary analytic tools were applied on the demographic, and purchase data - their expectations, satisfaction levels, demographic & geographic & psychographic tendencies, etc. The Process was initiated with the ETL function, cleansing and creation of Data Marts. Once this was done, an in-depth Analysis of the data using trend and segmentation was conducted to detect patterns and profile customers based on loyalty, Conquest and Defection. A segmentation model was applied to validate the hypothesis. A reliable model was built and validated to provide the customer the required intelligence to take decisions through corrective action.

Client Impact:

Based on these results, the Manufacturer could take corrective action by understanding the key triggers that caused customer defection. The necessary steps to implement the anti-churn strategy was clearly available through the results of the Analyses.

Explore how the Market Equations Consultative Approach to decision making works wonders.