There’s a lot of big buzz about Big Data these days, and with good reason. When applied effectively, data delivers a couple of significant advantages: (1) providing better customer experiences and (2) making customer-care operations more efficient. That’s an incredibly powerful one-two punch.
In our brave new world where customer experiences carry more weight and impact than ever before, it’s no wonder data has become such a hot commodity. As companies work to craft clearer pictures of their individual customers, many are beginning to find out that data isn’t enough. According to the Forester 2013 Customer Experience Predictions report many companies in the coming years will “Spend enormous amounts of time and money amassing new data sources—and less effort figuring out what to do with it all.”
Confronting the crossroads of the data revolution
The quandary of too much data and too little insight has brought the Big Data revolution to a crucial crossroads. Organizations have invested a lot of effort ramping up data collection without adequately planning how to analyze and apply it. At InfoCision (News - Alert), we have helped a wide variety of businesses and nonprofits to turn data insights into better customer experiences and more cost-efficient programs. Let’s look at three different examples of how organizations have applied data in creative and effective ways to improve customer care and increase return on investment (ROI).
Case study # 1: Missing the mark with a costly single-channel strategy
A leading wireless provider was employing a single-channel strategy to encourage customers to renew their contracts. They were sending out a direct mail piece to tens of millions of customers. Over time, the strategy was yielding increased costs and diminishing returns—resulting in a price tag (News - Alert) of $130 for each customer save.
After pouring through the data, a three-tiered retention strategy was designed using text messaging, direct mail and phone. The goal of the program was threefold: increase retention, increase ROI and decrease renewal traffic to their retail stores (which are primarily used for acquisition and, therefore, the most expensive method of renewal).
Funneling data for a more focused multichannel approach
After using data to filter through the customers, the targeted customers were sent a text message with a customized offer based on their plan type and other customer identifiers. The “phone exclusive offer” text message generated 160,000 inbound calls, saving 83,200 customers and diverting them from the retail outlets.
The next step was to send an exclusive offer via direct mail. These customers were identified based on whether they had opted out of future offer mailings and the profitability of the customer’s usage. The remaining 1.38 million customers were sent a personalized direct mail piece specific to their plan, geography, demographics and other individual characteristics. This strategy generated another 55,000 inbound calls and 28,700 saved customers.
After weeding out those who did not respond to the text message or direct mail piece, 675,000 customers remained. Sixty percent of the customers were reached with a phone exclusive offer—which resulted in another 74,000 inbound calls and 38,600 saved customers.
Results: Lower costs and higher revenue
Ultimately, the company was able to save over 150,500 customers. With a dramatically lower cost to save each customer—$14.65 compared to $130—the company’s ROI also increased significantly. The sales revenue realized from the saved customers was an impressive $161 million compared to $96 million prior to the multichannel campaign.
Case study #2: Using data to combat the costs of churn and burdens of acquisition
A major wireless provider was investing significant marketing dollars into maintaining their customer base. The primary way they were doing this was through new customer acquisition. They were maintaining their numbers—but the cost of acquiring each new customer was $305. Under this model, the company had an annual net income per customer of $90.
Their acquisition marketing efforts were saddled with the burden of replacing a yearly churn rate of 7 percent of existing customers. To maintain their customer base throughout the year, the company added 1.7 million new customers at a total cost of $533 million.
Leveraging data for greater customer retention
The company decided to test a telephone campaign to help maintain their customer base at a lower overall cost. The first step was analyzing the data to identify customers most at risk for churn. This population consisted of approximately 5 percent of the company’s total customer base.
Through this campaign, nearly 1.5 million customers were contacted throughout the year. As a result of these calls, 32 percent of all contacted customers converted to contract renewal (or 473,250 individuals). More importantly, the cost to the company per renewed customer was only $28—significantly lower than the $305 cost of acquiring a new customer.
Results: Reduced churn and raised income
Ultimately, the telephone retention campaign reduced the annual churn rate from 7 percent to just over 3 percent. It also increased the annual net income per customer from $90 to $100. That’s an annual gain of over $130 million, and a net income gain to call center cost of 10:1.
Case study #3: Using real-time data to create more personal appeals
A national public policy women’s organization was running a phone campaign centered on a survey. At the beginning of the call, women were asked what the most important issues were to them. After providing a response, callers were then led through a standard appeal—which was the same for everyone no matter how they responded to the survey.
With the standard appeal, the response rate was 30 percent with a fulfillment rate of just under 84 percent for a total of $506,652. Thinking that a more personalized approach would produce better results, the organization instituted a new strategy to better engage callers.
Employing real-time data to make stronger connections
To more effectively speak to the donors’ interests and the issues they were passionate about, four different appeals were developed based on donor responses to the initial survey question.
To bring the strategy to life, innovative “Inscription” call center technology was used. This technology automatically tailors the script and allows for real-time changes based on data gathered during the call. Using Inscription increased the response rate to 33 percent and helped to increase the dollars per completed call, and the dollars fulfilled by 6 percent.
Results: Increased engagement and elevated response
The more personal approach of using real-time data improved results and enhanced the overall value of the campaign. It also served to heighten donor engagement and connection with the organization—which may increase long-term donor value moving forward. In addition to the customized appeal, donors were asked at the end of the call what issues should be focused on in the remainder of the year. Their responses generated the next two telemarketing appeals.
Keeping customers at the center of a data-filled future
As the buzz on Big Data shifts from adoption to application, it’s important to keep the customer at the heart of all your efforts. It’s easy to get lost in the figures or intimidated by the “bigness” of all that data. But remember: It’s not about numbers, it’s about insights. It’s about what you can learn about your customers that will enable you to provide better experiences.
Edited by Blaise McNamee