Slides from London presentation on Customer Retention. Focus on use of data-based insight approaches to understanding and tackling churn
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Retention strategy will under-perform without creating differentiated propositions for key customer states
Tenure
Chu
rn R
isk
High
5 years +
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Service
Service
Service
Tenure Basedoffer
Service
Service
Tenure Basedoffer
Tenure Basedoffer
ServiceService
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Samplepremium
Product deal
Extra kitFull price
Extra kitFull price
Extra kitFull price
Samplepremium
New kit£XX offer
New kit£XX offer
New kit£XX offer
On-line
Product upgrade
Extra kitoffers
Pay up front3,6 months
Free content
Replace Old
equipment
Optimisedupgrade offer 2
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upgrade offer 3
Free content (14 days, free)
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BOGOFcontent
Sample DVD
Mid tierSample
CONTENT£5 for x months
CONTENT£5 for x months
Extra kitoffers
Extra kitoffers
FreeProduct
Free content
Product upgrade
Existing proposition
New – product based
New – Sample based
New – pre payment
New – anniversary
Low
Sample DVD
BOGOFcontent
BOGOFcontent
Free content
FreeProduct
Optimisedupgrade offer 2
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Optimisedupgrade offer 2
Replace Old
equipment
Fairly well covered, but only
with introduction of new propositions
(green)
illustrative
Steps to Success
14Customer Retention Summit October 2009
Strategies for Customer Acquisition & Retention must be joined up
Need for New Customers
Need to Keep Existing Customers
Financials
Customer Expectations
Customer Understanding
Marketing Techniques
Metrics
• Scale economies/market position• Return against CLV/Payback
• Set by Marketing & Sales Promises
• Researched• Assumptive
• Interruption advertising to all• Offers, incentives, discounts
• Volumes• Costs
• Market position• Retained volume/value at
lowest cost
• Set by experience
• Transactional• Behavioural
• More targeted communications• Offers, incentives, discounts
• Volumes• Values• Costs
Steps to Success
15Customer Retention Summit October 2009
Agenda
• What do we mean by ‘integrated insight’?
• Steps to Success
• Case Study and Summary
16Customer Retention Summit October 2009
An integrated insight approach transformed churn management
Starting Point Delivering the solution Building on success
• Success in growing its customer base but it came at a price – an increasing customer churn problem
• Internal analytical teams and other consultancies had been tasked with solving the problem, but none of them were able to tell the executives what was really driving churn
• Focus on diagnostic, hypothesis-based approach
• Concentrating only on the material issues
• Capability to enable analysts to deliver rapid profiling
• Development of portfolio analysis
• Impact analysis of organisational policies and processes
• Interpretation and synthesis to turn insight into a coherent strategy
• Scenario modelling
• New churn strategies and policies implemented
• Automated portfolio dynamic reporting
• Propensity Modelling based on strategy objectives
• Proactive retention programme
• Optimisation of retention budgets
Case Study: Integrated insight for Churn Management
17Customer Retention Summit October 2009
Key dynamics were identified and remedial initiatives implemented and measured
Key Trends Identified
Growing instability in client baseDamaging “offer culture”
Churn risk from basic channelsHigh churn from winbacks