Developing a customer win Backstrategy
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Transcript of Developing a customer win Backstrategy
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8/17/2019 Developing a customer win Backstrategy
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DEVELOPING A CUSTOMER WIN-BACK STRATEGY
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8/17/2019 Developing a customer win Backstrategy
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CUSTOMER WIN-BACK STRATEGIES ARE ALL TO OFTEN BUILT ONMISCONCEPTIONS
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“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
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8/17/2019 Developing a customer win Backstrategy
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TO SUCCEED, COMPANIES WILL NEED TO BUILD OPERATING MODELS ANDANALYTICAL CAPABILITIES THAT DRIVE MASTERY OF THE ENTIRE CUSTOMERLIFECYCLE
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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
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8/17/2019 Developing a customer win Backstrategy
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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
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3
4
7
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8/17/2019 Developing a customer win Backstrategy
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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(((
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8/17/2019 Developing a customer win Backstrategy
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8/17/2019 Developing a customer win Backstrategy
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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
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8/17/2019 Developing a customer win Backstrategy
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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$
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8/17/2019 Developing a customer win Backstrategy
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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$$ I')a*% : 6igh@/ed@;ow• Cr!%!*al De)e"de"*y6
" e.g. ' 0latform, %;'C /odel etc
• I')a*% KPI
" Aperational 50 : %onversion, Hield, HD enewal etc
• Use the above to generate an &/erall )r!&r!%y
7
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8/17/2019 Developing a customer win Backstrategy
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COMPANIES OFTEN STRUGGLE TO DEFINE AND OPERATIONALI?E THE RIGHTKPIS ACROSS THE CUSTOMER LIFECYCLE
D?
O"e 'e%+&d !" !$&la%!&" 0!ll "&% %ell %+e 0+&le $%&ry &r (!/e a *&')le%e #"der$%a"d!"( &%+e 1#$!"e$$
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(!""!"(& '&"%+"# $$J
J
REVENUE VALUE
CUSTOMER VOLUME
PROS CONS
D&llar Re/e"#e Re%e"%!&" DRR 5 Re/e"#e r&' E=!$%!"( C#$%&'er Re"e0al
Re/e"#e C+#r" 5 M&"%+ly Re&**#rr!"( Re/e"#e MRR
C#$%&'er Re%e"%!&" Ra%e CRR 5 Per*e"%a(e & *#$%&'er$ 0+& re"e0
C#$%&'er C+#r" Ra%e 5 A%%r!%!&" Ra%e
C+#r" A%%r!%!&"
N#'1er & *a"*ella%!&"$ !" a )er!&d
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8/17/2019 Developing a customer win Backstrategy
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REDUCE THE NUMBER OF UNPROFITABLE CUSTOMERSAC@UIRED
DD
C#$%&'erS%ra%e(y
CLTV
Pr& !%a1!l!%y
O)era%!&"al!8edPr&)e"$!%y
O)era%!&"al!8eSe('e"%a%!&"
C#$%&'er S*&r!"(
S%ra%e(y
O)%!'!8e %rea%'e"% $%ra%e(!e$ %& red#*e *&$%-%&-$er/e &" %+e$ea**"%$
&ecommendations
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8/17/2019 Developing a customer win Backstrategy
12/17
EMBED OPERATIONALI?ED SEGMENTATION < PROPENSITYACROSS THE CUSTOMER OPERATING MODEL
D2
C#$%&'erS%ra%e(y
CLTV
Pr& !%a1!l!%y
O)era%!&"al!8edPr&)e"$!%y
O)era%!&"al!8eSe('e"%a%!&"
C#$%&'er S*&r!"(
S%ra%e(y
E'1ed O)era%!&"al!8ed Se('e"%a%!&" < Pr&)e"$!%y a*r&$$ %+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
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8/17/2019 Developing a customer win Backstrategy
13/17
IMPROVE @UALITY OF LEADS
D-
C#$%&'erA*9#!$!%!&"
CLTV
Pr& !%a1!l!%y
O)era%!&"al!8edPr&)e"$!%y
O)era%!&"al!8eSe('e"%a%!&"
C#$%&'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
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8/17/2019 Developing a customer win Backstrategy
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
O)era%!&"al!8edPr&)e"$!%y
O)era%!&"al!8eSe('e"%a%!&"
C#$%&'er S*&r!"(
C&"/er$!&"
;eadouting
7ased An%ustomer
*core
C#$%&'erC&"/er$!&"
• 4iscounts aligned to profitability@;'C of different segments• 0olicy clearly defined and enforced• *et subscription floor to ensure all customers are inherently profitable
3 • Aptimi(e the payment policy to minimi(e account suspensions for high risk segments
4• efine commission plan to have tiers based on pro&ected customer lifetime value:
o 6igher commission for growth accountso ;ow@)o commission for customers with pro&ected low ;'C
7 • obust key account planning processes supported by ;'C and profitability segments
: • Full commission does not get paid unless a full account profile is completed• 0rocess is clearly defined and compliance is measured
D 2 - 8
9
&ecommendations
&ecommendations
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8/17/2019 Developing a customer win Backstrategy
15/17
ENHANCE E>ISTING CUSTOMER STRATEGY AND ;OURNEYSWITH A REFINED SEGMENTATION MODEL
D9
C#$%&'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&)&$!%!&"J
2 -Re"e0 &rW!"1a*
Re"e0 &rW!"1a*
Bedd!"( I"
asts untiladoption orallocation to
"ark or)nprofitable
segment
D
1nhanced 'reatment *trategyIllustrative
CLTV
Pr& !%a1!l!%y
O)era%!&"al!8edPr&)e"$!%y
O)era%!&"al!8eSe('e"%a%!&"
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
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8/17/2019 Developing a customer win Backstrategy
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'
Par l&0 *&"%a*%, re"e0al
I"%e"$!/eCare
Re%e"%!
&"
Tr!((er
$
U")r& !%a1le 5 Ne0 Pr&)&$!%!&"J
2 -
Re"e0 &rW!"1a*
Re"e0 &rW!"1a*
Bedd!"( I"
asts untiladoption orallocation to
"ark or)nprofitable
segment
D
1nhanced 'reatment *trategyIllustrative
CLTV
Pr& !%a1!l!%y
O)era%!&"al!8edPr&)e"$!%y
O)era%!&"al!8eSe('e"%a%!&"
C#$%&'er S*&r!"(
Ma"a(e'e"%
&ecommendations
For non"usage customers withpotential to get value, form a+4ata ;ead@3ppointment
Generation value proposition
• ;ower base fee with an outbound 'ele"marketing service offering where company ispaid R! per lead
• eview account at months, and if low@no
usage but profitable,
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8/17/2019 Developing a customer win Backstrategy
17/17
E>PLORE OPPORTUNITY FOR ALTERNATIVE CONTRACTINGMETHODS THAT WILL IMPROVE RETENTION
DE
C#$%&'erMa"a(e'e"%
Gr&0 I"/e$%
Far'
Par l&0 *&"%a*%, re"e0al
I"%e"$!/eCare
Re%e"%!
&"
Tr!((er
$
U")r& !%a1le 5 Ne0 Pr&)&$!%!&"J
Re"e0 &rW!"1a*
Re"e0 &rW!"1a*
Bedd!"( I"
asts untiladoption orallocation to
"ark or)nprofitable
segment
D
1nhanced 'reatment *trategyIllustrative
CLTV
Pr& !%a1!l!%y
O)era%!&"al!8edPr&)e"$!%y
O)era%!&"al!8eSe('e"%a%!&"
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
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