Customer churn at AKN company in the powder coating sector

Abstract

This thesis addresses the pressing issue of customer churn at AKN Company, a key player in the powder coating sector, particularly focusing on the architectural segment in Vietnam. AKN Vietnam has experienced a significant decline in sales revenue from 2020 to 2023, with a negative CAGR of 14.1%. This trend is primarily attributed to a high customer churn rate, which peaked at 16% in 2023. The research employs a mixed-method approach, combining quantitative data analysis from financial reports and CRM systems with qualitative insights from in-depth interviews with senior and middle managers, as well as business customers. The study identifies several critical factors contributing to customer churn, including the high pricing of AKN's products compared to competitors, poor service quality in sample preparation and complaint handling, and aggressive acquisition strategies by competitors. The primary problem is the perceived high pricing of AKN’s products, leading to customer dissatisfaction and a shift to alternative suppliers. To address these challenges, the thesis proposes a two-pronged strategy. Firstly, astrategic price reduction is recommended to enhance affordability and align with market expectations. Secondly, enhancing the perceived value of AKN’s offerings through product innovation, improved customer service, and effective marketing is crucial. An action plan is outlined, which includes immediate price adjustments. Continuous monitoring and feedback mechanisms are also suggested to ensure the effectiveness of these strategies. In conclusion, resolving the customer churn issue is vital for AKN Vietnam’ssustained success in the competitive powder coating market. By strategically adjusting prices, AKN can improve customer retention, strengthen its market position, and achieve long-term growth.