In short, Retention Automation uses analytics to take action and reduce churn.
Companies spend thousands of dollars on lead generation. Inbound marketing, marketing automation, and advertising fills up a bucket with new customers. But they are trying to fill a bucket with holes. Customers are leaving. These solutions do nothing to retain customers and keep them inside the bucket.
What are companies doing to retain customers?
One of two things: analytics or mass email. Email software (even though sometimes they are segmented by customer type) sends mass emails to everyone hoping that the latest offers brings customers to shop again. Most of these efforts are futile because they are not addressing customer issues, just rather pushing products in the consumer’s noses.
Other companies doing more advance analytics are looking at charts. Like our video says, charts of all types and charts you’ve never even heard of before, but there is a huge gap between predictive analytics and action.
5 Steps to Retention Automation
Retention Automation surfaces customers at risk and optimizes actions to bring customers back to your store. There are 5 steps needed to complete in order to benefit from this process:
- Connect data. Solution needs to leverage cloud connectors in order to get sales, customer, feedback, and web data all in one place.
- Predict. Acting before it is too late is the key. Data mining algorithms predicts the steps customers take before churn, once determined, it allows a company to act at step one or two, not after 180 days of inactivity, too late.
- Alert. There might be some customer issues you want to take care of your self at a customer level. For example, top 5% is “extremely dissatisfied” with service.
- Action. Which action to best take: email, phone, tweet? Which email works best? Send, measure, learn, optimize.
- Segment. You know your business better than anyone else even better than data mining algorithms. Therefore, you should be able to segment and automate. The system should then self-learn and resend to new customers the most successful messages to each segment.
What’s the benefit?
Companies on average lose 25% of customers every year. Let’s suppose your company has 30,000 customers. This means that your company is losing 7,500 customers a year. If it costs you $100 to acquire a new customer it means that you are spending $750,000 a year only to maintain the same number of customers year over year!
What happens if Retention Automation reduces churn rate to 22%? It’s saving 900 customers from going to your competitors at $100 each is a return of $90,000 saved. What if churn reduces to 20%? The point is that the result is directly measureable and companies will know quickly if their investment is worth it.
That’s one way to measure. You can use customer lifetime revenue as a measure of how much you lost. Since retention automation focuses on the most important customers first, the value is even greater.
Contact us to set up a quick demo and show you how Mineful can help your company surface customer issues and retain its most important customers.
