By M. Isi Eromosele

Companies can achieve better retention rates, reduce acquisition costs and boost market share by addressing the root causes of customer attrition and applying targeted treatment strategies that involve all service channels and functions in an end-to-end effort to improve the customer experience.

Most companies with large and diverse customer or subscriber bases are struggling to retain customers. Yet few understand exactly why customers leave them and fewer still know what to do about it.

Customer switching varies by industry, but it is plainly a universal problem, a cause for concern since the cost of acquisition is always significantly higher than the cost of retention.

Many organizations lack the tools to identify the drivers of churn. The ability to correlate churn to actionable customer segments, for example, is critical to retaining customers by proactively addressing their needs.

Few organizations are masters of retention marketing. The ability to deploy highly targeted offers in-market across multiple channels at speed; to learn which offers work most effectively, and scale them; and to take full advantage of customer-initiated contacts in order to make highly-targeted retention offers.

Too often, unhappy customers suffer the consequences of organizational processes optimized to deliver operational efficiencies, instead of positive customer experiences poorly executed product or service launches, erratic or conflicting experiences across multiple channels and inadequately trained and equipped employees.

Principles of Successful Customer Management

In many markets, growing the customer base has been all about the acquisition of new customers and retention marketing has typically come a distant second in terms of senior management attention and resource allocation.

To reverse this legacy mind-set and manage customer attrition effectively, organizations need to adhere to three fundamental principles:

An Integrated, Cross-Functional Approach

An Integrated Cross-Functional Approach is the nerve center of a successful customer management program. Spanning organizational boundaries and centralizing customer experience improvement decisions, it streamlines the end-to-end churn reduction process across analytics, marketing, channels, IT and finance and drives swift and timely course corrections based on a closed-loop feedback around the effectiveness of existing treatments.

Thanks to its cross-functional structure, the above approach eliminates the inefficiencies caused by organizational bottlenecks, thereby significantly accelerating the time-to-market of retention treatments.

It is also responsible for driving any necessary cultural changes, including the introduction of new performance metrics and incentives. And because its decisions affect the enterprise as a whole, it’s vital that the company’s senior leaders are involved in setting the direction and governance of the churn management program it coordinates.

Customer Insight and Analytics

Retention strategies based on customer value and profitability are critical to success, hence the importance of analytics.

By leveraging a diversity of data, demographic and behavioral (products, usage, interaction), as well as value-related, retention analytics can predict just when and why customers are likely to churn. They determine the customers' value to the company in terms of both current and future revenue and profitability, as well as their influence on other customers.

They also infer the drivers of churn by using multi-dimensional analysis in novel ways. Correlating churn with the interactions a customer has had with the company can trigger retention treatments, as well as identifying areas where the customer experience needs to be improved.

This may sound straightforward, but it requires the ability to build a service interaction history across all interaction channels retail, contact centers, Web and Integrated Voice Response (IVR) systems.

Keeping customers can be challenging but as markets mature, successful retention strategies are becoming an increasingly essential element of competitive advantage for many different industries.

Such strategies can be developed. They hinge, crucially, on really understanding what motivates different customers to churn, a capability dependent on sophisticated analytics.

They also require building a whole new set of capabilities that accelerate speed to market, maximize campaign return while minimizing risk and ensure the right experience for the right customer.

Equipped with an end-to-end operating model that optimizes customer interactions across all channels, companies can ensure delivery of a better experience for all their customers.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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