developing a customer win backstrategy

8/17/2019 Developing a customer win Backstrategy

1/17

DEVELOPING A CUSTOMER WIN-BACK STRATEGY


2/17

CUSTOMER WIN-BACK STRATEGIES ARE ALL TO OFTEN BUILT ONMISCONCEPTIONS

2

“It is more profitable tokeep existingcustomers”

“All sales drive profitability”

“Targetingdeparting

customers is theonly focus”

• Understanding the customer lifecycle allows more effective targeting of customersbefore they decide to depart vs. accurate predictions of leaving customer numbers

• Understand costs: customer acquisitions and other transaction costs• Future revenue: products taken, duration, likelihood of switches or cancellation,

upsell opportunities

“It is moreexpensive to

acquire newcustomers”

• etaining departing customers can be e!pensive if they have already decided toleave

• Understanding the correct spend to acquire new customers drives profitability andlimits over"spend in terms of opportunity costs #e.g. marketing or acquisitionspend$

“Individualcontact points provide the

solution”

• %ustomer churn is dependent on customer e!perience across the &ourney, not onlysingle points of contact

• 'o ensure full impact of churn reduction, there is a requirement for integratedsolutions across the different parts of an organi(ation

• )ot all #e!isting$ customers are profitable and it might be better to loseunprofitable customers

• *ome customers leave due to +natural reasons caused by changes in thebusiness and therefore their retention might not be cost"effective


3/17

TO SUCCEED, COMPANIES WILL NEED TO BUILD OPERATING MODELS ANDANALYTICAL CAPABILITIES THAT DRIVE MASTERY OF THE ENTIRE CUSTOMERLIFECYCLE

-

Clearly de !"ed C#$%&'erMa"a(e'e"% O)era%!"( M&del

Ma$%er C#$%&'er E"(a(e'e"% A*r&$$ %+eE"%!re l! e*y*le

C#$%&'er W!"-Ba* Val#e Pr&)&$!%!&"

%hannel*trategy

./arketing/i!

C#$%&'erMa"a(e'e"%

O)era%!"( M&del

%ustomer/anagement

0rocesses.*tructures

*alesForce

1ffectiveness

%ustomer2nsights

.3nalytics

4ata,502s,and

0e

rformance

eporting


4/17

CUSTOMER WIN-BACK STRATEGY PLANNING

. De/el&) ra'e0&r %& *&''#"!*a%e %+e &/erall $%ra%e(!* &12e*%!/e$ &r a *#$%&'er 0!"-1a* )r&(ra'

3. B#!ld %+e )&r% &l!& & !"!%!a%!/e$ a"d al!(" %& %+e $%ra%e(!* ra'e0&r

4. De$!(" a 1l#e)r!"% &r %+e #%#re-$%a%e C#$%&'er O)era%!"( '&del 5 +&0 d&e$ %+!$ all !%%&(e%+er6

a. nitiative interdependencies across customer lifecycle

b. 6igh"level *tructure, 0rocess, 3ccountability, and *ystems

7. Pr!&r!%!8e a"d $e9#e"*e %+e !"!%!a%!/e )&r% &l!&

a. 7usiness mpact #requires definition of initiative measures$

b. 1ase of mplementation #requires understanding barriers to implementation$

:. Ba$el!"e KPI$ a"d de/el&) 1e"e !%$ *a$e &r ea*+ !"!%!a%!/e

8

3

4

7

:


5/17

DEVELOP FRAMEWORK TO COMMUNICATE THE OVERALL STRATEGICOB;ECTIVES FOR A CUSTOMER WIN-BACK PROGRAM

9

Overall objective is to…improve retention, reduce cost-to-serve…

O12e*%!/e$ &r C#$%&'er W!"-Ba* Pr&(ra'6

S%ra%e(y Mea$#re'e"%A*9#!$!%!&" Ma"a(e'e"%C&"/er$!&"

Customer ifecycle !anagement

Adopt a customerlevel "# that

changes the wayCustomers areacquired andmanaged$

%eliver highlytargeted marketing

campaigns thatimprove customer

yield andretention$

&efine treatmentstrategy anddevelop new

value propositionsfor select

segments$

Improve the qualityand management

of the 'ales"ipeline to$

!easure thecustomer(((


6/17


7/17

BUILD A BLUEPRINT FOR THE FUTURE STATE OPERATING MODEL

E

Invest andapply

analytics

CarefullySegment

YourCustomer

Base

Develop

Customer /Account Journeys

Embed /Onboard

Customers

Developroactive

!etention/ "in#Bac$

%riggers

4


8/17

CUSTOMER ;OURNEY MAP SHOW THE MINIMUM CONTACT POINTSTHAT CUSTOMERS CAN E>PECT TO HAVE WITHIN A YEAR

4

Ea*+ 0+eel re)re$e"%$ a d! ere"% *#$%&'er *&"%a*% $%ra%e(y,$)l!% 1y %+e a(e & *#$%&'er

.• First year, high value customers have the most contactthroughout their D2 month term, as they are the highest riskaccounts.

T+e 2r"ey$ are $)l!% !"%& %+ree $%a(e$, %+e$e are :• welcome #blue$• engagement #green$, and

• renewal #pink$


9/17

PRIORITI?E AND SE@UENCE THE INITIATIVE PORTFOLIO

>

P!llar I"!%!a%!/e O0"er Le/er Ea$e & I')l. B#$. I')a*% Cr!%!*alDe)e"de"*y6O)era%!&"alKPI Pr!&r!%y

%ustomer*trategy D %;'C /odel

2 0rofitabil ity /odel

- %ustomer *egmentation

8 %ompetitive ntelligence

9 3lignment to overallGrowth *trategy

%ustomer 3cquisition

%ustomer *coring/ethodology

E *egmented %ustomer4atabase

'argeted %ampaigns

%ustomer 3cquisition > ;eads outing to *ales

D? 4iscounting *ubscription *ales

DD 1nhance %ommissionwith quality metric

D2 0ayments 0olicy

D- %ommission on 'elesales6andover

D8 5ey 3ccount/anagement 0lanning

A$ a !r$% $%e) !" %+e )r&*e$$, *a)%#re &r ea*+ !"!%!a%!/e

• O0"er • I')r&/e'e"% Le/er

" e.g. 0rocess, 0olicy, *tructure, *ystems etc• Ea$e & I')le'e"%a%!&" : 6igh@/ed@;ow

" e.g. ' dependencies• B#$!"e$$ I')a*% : 6igh@/ed@;ow• Cr!%!*al De)e"de"*y6

" e.g. ' 0latform, %;'C /odel etc

• I')a*% KPI

" Aperational 50 : %onversion, Hield, HD enewal etc

• Use the above to generate an &/erall )r!&r!%y

7


10/17

COMPANIES OFTEN STRUGGLE TO DEFINE AND OPERATIONALI?E THE RIGHTKPIS ACROSS THE CUSTOMER LIFECYCLE

D?

O"e 'e%+&d !" !$&la%!&" 0!ll "&% %ell %+e 0+&le $%&ry &r (!/e a *&')le%e #"der$%a"d!"( &%+e 1#$!"e$$

WAYS TO MEASURE CHURN PROS AND CONS OF USING METRIC

• ncludes % but ad&usts forrevenue decrease I

• Useful when focus is onrevenue

• ncludes upgrades,downgrades, new sales etc..

• Focus on re"occurring revenue• / e!isting standard

reporting metric

• Focus on customer retention:each acquired customer has anassociated cost

• *imple metric focused oncustomer churn

• Focus on absolute number

• Calue could increase even iflosing customers

• ;ack of focus on customerretention, low value could haveimportant implications

• Cariations in items included in/ : e.g. one"off fees

• %hallenges in underlying /calculation: e.g. dates used forrevenue

• Cariations in time period usedand definitions of customer

• 4oes not take into accountvalue of customers

• 4ifferent denominators used#start , end, average$

• Cariations in periods andcalculation methods

• 4oes not take into accountrelativity

re*#rr!"(/al#e

re*#rr!"(/al#e

C#$%&'er$Re%a!"ed

C#$%&'er$L&$%

C#$%&'er$L&$%

CRR C#$%&'er$a% e"d# " Ne0 *#$%&'er$a*9#!red $ @C#$%&'er$ a%1e(!""!"( >

C+#r"Ra%e

C#$%&'er$a% 1e(!""!"(# " C#$%&'er$a% e"d $ @C#$%&'er$ a%1e(!""!"( >

DRR CRR ! De*rea$e!" /al#e

Re/e"#eC+#r"

MRR 1e(!""!"(& '&"%+# " MRRe"d & '&"%+ $ @# MRR )(rade$ MRR 1e(!""!"(& '&"%+"# $$J

J

REVENUE VALUE

CUSTOMER VOLUME

PROS CONS

D&llar Re/e"#e Re%e"%!&" DRR 5 Re/e"#e r&' E=!$%!"( C#$%&'er Re"e0al

Re/e"#e C+#r" 5 M&"%+ly Re&**#rr!"( Re/e"#e MRR

C#$%&'er Re%e"%!&" Ra%e CRR 5 Per*e"%a(e & *#$%&'er$ 0+& re"e0

C#$%&'er C+#r" Ra%e 5 A%%r!%!&" Ra%e

C+#r" A%%r!%!&"

N#'1er & *a"*ella%!&"$ !" a )er!&d

:


11/17

REDUCE THE NUMBER OF UNPROFITABLE CUSTOMERSAC@UIRED

DD

C#$%&'erS%ra%e(y

CLTV

Pr& !%a1!l!%y

O)era%!&"al!8edPr&)e"$!%y

O)era%!&"al!8eSe('e"%a%!&"

C#$%&'er S*&r!"(

S%ra%e(y

O)%!'!8e %rea%'e"% $%ra%e(!e$ %& red#*e *&$%-%&-$er/e &" %+e$ea**"%$

&ecommendations


12/17

EMBED OPERATIONALI?ED SEGMENTATION < PROPENSITYACROSS THE CUSTOMER OPERATING MODEL

D2

C#$%&'erS%ra%e(y

CLTV

Pr& !%a1!l!%y



C#$%&'er S*&r!"(

S%ra%e(y

E'1ed O)era%!&"al!8ed Se('e"%a%!&" < Pr&)e"$!%y a*r&$$ %+eC#$%&'er O)era%!"( M&del

A*9#!$!%!&"• 0rospect database• /arketing %ampaigns• ;eads outing

3

C&"/er$!&"• 4iscounting• %ommission on Kuality

• 0ayment methods• 6andover L * to 53

4

Ma"a(e'e"%• mprove bedding in• 1nhanced treatment strategies• 'rigger based retention

7Mea$#re'e"%• Aperational 50 s• %ustomer *urveys

D

8

-

2

CLTV

Pr& !%a1!l!%y

M Pr&)e"$!%yM&del

J O)era%!&"al!8ed Se('e"%a%!&"C#$%&'er S*&re

&ecommendations


13/17

IMPROVE @UALITY OF LEADS

D-

C#$%&'erA*9#!$!%!&"

CLTV

Pr& !%a1!l!%y



C#$%&'er S*&r!"(

Customer'egmentation

/arketing0rospects4atabase

'argeted%hannel

/arketing#00%, *1A, 0 , 0rint,

1vents,$

0urchased;ists From- rd 0arties

;eadouting

7ased An

%ustomer*core

/arketingNeb"'o"

;eads

'argeted4atabase/arketing

#email$

A*9#!$!%!&"

Anline Formnbound %all

'o 'elesales

Ooe #* % code driven,%amp. %ode N 0$

#P2??k %ontacts$

• 3ugment e!isting prospect database to have good data on the -?"8?5 best targets• Use customer strategy to optimi(e lists purchased from - rd parties

3• Use the customer strategy to improve targeting and segmentation of the e!isting prospects

database

4 • Use the ;'C learnings to target the most profitable customers through online and offlinecampaigns

• /arketing is planned to target higher value customers using the ;'C models• Aptimi(e marketing mi! and customi(ed messaging7

: • ;eads are rapidly categori(ed and routed through best channel@advisor

D 2

-

8

8

&ecommendations

&ecommendations


14/17

IMPROVE @UALITY OF THE SALES PIPELINE

D8

'elesales

5ey 3ccounts

6andover to 3ccount

/anagement

4iscount *ubscription*ales 0olicy

%ommission'ype: Kuality

/etric

%ontracting: 3uto" enew,%all Anly, >?

4ay

*egment0ayment

0olicy

CLTV

Pr& !%a1!l!%y



C#$%&'er S*&r!"(

C&"/er$!&"

;eadouting

7ased An%ustomer

*core

C#$%&'erC&"/er$!&"

• 4iscounts aligned to profitability@;'C of different segments• 0olicy clearly defined and enforced• *et subscription floor to ensure all customers are inherently profitable

3 • Aptimi(e the payment policy to minimi(e account suspensions for high risk segments

4• efine commission plan to have tiers based on pro&ected customer lifetime value:

o 6igher commission for growth accountso ;ow@)o commission for customers with pro&ected low ;'C

7 • obust key account planning processes supported by ;'C and profitability segments

: • Full commission does not get paid unless a full account profile is completed• 0rocess is clearly defined and compliance is measured

D 2 - 8

9

&ecommendations

&ecommendations


15/17

ENHANCE E>ISTING CUSTOMER STRATEGY AND ;OURNEYSWITH A REFINED SEGMENTATION MODEL

D9

C#$%&'erMa"a(e'e"%

Gr&0 I"/e$%

Far'

Par l&0 *&"%a*%, re"e0al

I"%e"$!/eCare

W!-

Ba*,

Tr!((er

U")r& !%a1le 5 Ne0 Pr&)&$!%!&"J

2 -Re"e0 &rW!"1a*

Re"e0 &rW!"1a*

Bedd!"( I"

asts untiladoption orallocation to

"ark or)nprofitable

segment

D

1nhanced 'reatment *trategyIllustrative

CLTV

Pr& !%a1!l!%y



C#$%&'er S*&r!"(

Ma"a(e'e"%

&ecommendations

• 1nhance the bedding in process and ensure it is aligned with profitability , %;'C, andoperational segmentation models

3 • 4evelop further segment overlays on e!isting %ustomer Qourneys to reflect the profitability ,%;'C, and operational segmentation models

4• efresh the propensity model to be fed with data on regular basis• 3 regular #probably weekly@monthly$ process of identifying customers whose propensity to churn

has changed• 'hese red flagged customers to be proactively called if profitable

&ecommendations


16/17

E>PLORE POTENTIAL FOR ALTERNATIVE BUSINESS MODELSTO TREAT LOW USAGE PROFIT CUSTOMERS

D

C#$%&'erMa"a(e'e"%

Gr&0 I"/e$%

Far'


I"%e"$!/eCare

Re%e"%!

&"

Tr!((er

$

U")r& !%a1le 5 Ne0 Pr&)&$!%!&"J

2 -

Re"e0 &rW!"1a*

Re"e0 &rW!"1a*

Bedd!"( I"


"ark or)nprofitable

segment

D


CLTV

Pr& !%a1!l!%y



C#$%&'er S*&r!"(

Ma"a(e'e"%

&ecommendations

For non"usage customers withpotential to get value, form a+4ata ;ead@3ppointment

Generation value proposition

• ;ower base fee with an outbound 'ele"marketing service offering where company ispaid R! per lead

• eview account at months, and if low@no

usage but profitable,


17/17

E>PLORE OPPORTUNITY FOR ALTERNATIVE CONTRACTINGMETHODS THAT WILL IMPROVE RETENTION

DE

C#$%&'erMa"a(e'e"%

Gr&0 I"/e$%

Far'


I"%e"$!/eCare

Re%e"%!

&"

Tr!((er

$

U")r& !%a1le 5 Ne0 Pr&)&$!%!&"J

Re"e0 &rW!"1a*

Re"e0 &rW!"1a*

Bedd!"( I"


"ark or)nprofitable

segment

D


CLTV

Pr& !%a1!l!%y



C#$%&'er S*&r!"(

Ma"a(e'e"%

&ecommendations

/ove to a +call"onlyfirst"time sale,renewal, and win"back process

• )ew sales, renewals, or win backs closed on thephone #scripted, recorded calls$

• 4evelop script and mandatory statement #email,' % s etc$

/ove to a +rollingcontract with >? daynotice renewalprocess

R&ll!"( *&"%ra*% 0!%+ Day "&%!*e a %er Year

o 0ro: )o renewal conversations

o %ons: )o lock"in protection against 37 afteryear D

2 -

developing a customer win backstrategy

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