Churn Customer Management in Retail Industry: A Case Study

Abstract

Retail industry is amongst the emerging industries globally, and has attracted increasing attention from practitioners and academicians. The retail environment is changing rapidly and characterized by huge competition from both domestic and foreign companies. Most of the companies produce identical goods and try to sell them at competitive prices. In this regard, finding new customers and make them a loyal one is one of the most difficult things for the retail sector. It costs five times more than keeping the old one (Idris et al., 2012). That is why, the concept of customer retention led to the emergence of a new term in the academic literature that is “Churn Management”. The aim of this study is to analyse the low and high efficient stores of Retailer X that are located in different parts of İzmir by conducting data envelopment analysis, and then examine the reasons of the churn customers in these stores both from customers and store managers perspective. Data was collected from Retailer X to conduct data envelopment analysis to find out low and high efficient stores. In the next stage, semi-structured interviews were conducted with both store managers and customers to be able to compare the perceptions of both sides. As a result of these interviews, the reasons of churn customers are classified into 7 groups that are product and stock level, price, promotions, physical atmosphere, interaction of sales personnel, after sales services and competitors.