Preventing Churn

By Kim S. Nash  |  Posted 2005-12-07 Print this article Print

Megachurches like the 25,000-member World Changers of Atlanta can teach corporations the true meaning of customer relationship management. How? They can look at their data and identify members, determine who could be volunteering more, contribute how much

Many corporations try to spot at-risk customers before they decamp, with mixed success. The mobile telecom industry suffers high churn, with as many as 30 percent of U.S. customers switching companies every year, according to researchers at the University of Colorado. And the top 20 U.S. banks, for example, lose 12 percent to 15 percent of their customers every year, says the management consulting firm A.T. Kearney.

The cost to replace each defecting customer with a new one varies by industry but can range from about $330 per customer in telecommunications, to $75 in banking and $14 for online retailers, according to a study by Shop.org and Boston Consulting Group, and company reports.

Arthur Hughes, a marketing consultant and author of three books on developing customer loyalty, says companies are just coming to grips with something megachurches have known for a long time: Personal connections prevent churn.

"If you're just dealing with a big corporation, you don't really care if you drop an insurance policy or switch banks," Hughes says. "But if there's a person involved—if an [insurance] agent has called you up recently or taken you to lunch—it's very difficult to cancel that product."

World Changers doesn't have a dossier on every person who comes through the door on a Sunday; sometimes, people come for years but elude the database because they aren't members. But through the 50 gigabytes of data on 25,000 known members and those tens of thousands of followers who enter the system by sending long-distance financial support, buying a product or attending a convention, the church can—and does—get personal.

Informal monitoring of turnout at each service and other anecdotal evidence shows World Changers' churn is a comparatively low 5 percent to 10 percent per year, Goodison and Hosey say.

Nevertheless, preventing churn is an issue Goodison and Hosey hope to address even better with a new church management system. The existing software doesn't track the level of detail the church seeks to fine-tune marketing efforts and continue to grow at the 9 percent to 10 percent rate it has attained for the past several years, they say.

For example, Hosey thinks many people drop out when they move out of the area; hence a push for the cyber-fellowship group. But she can't be sure, because the church collects no data on why people drop out. Exit interviews, by mail or e-mail survey if not in person, would uncover why the member was leaving and help World Changers head off dissatisfaction issues.

She would like to find more effective ways to get more congregants involved in the church, but can't right now for lack of data. She wants to do away with the separate applications that have grown up outside the UniVerse system.

By integrating the demographics and transaction activity of the member database with, for instance, the statistics of the volunteer database, she'd have a fuller view for each member.

Then, if newcomers join the church but don't volunteer or participate in any of the small-group fellowships offered, she could look at their demographics, find people of similar backgrounds who are active with the church, and promote similar activities to the non-active newcomers. "But until that data is collected uniformly in one location," she says, "I can't do it."

Goodison plans to survey the church's department heads about their requirements during the next few months, then create a request-for-proposal to send to various enterprise CRM vendors and church management suppliers.

He doesn't know whether he will buy a package and modify it or build another new system from scratch. Either way, the technology is expected to be in place in 2007, he says, and push World Changers to 30,000 members soon after.

Next page: Mixed Blessings

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Senior Writer
Kim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.

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