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Casual Articles - Recency for Customer Retention on Subscription Based Services
Creating Your Unique Selling Proposition"Don't tell them what you do. Tell them what you do for them.”To capture a larger market share and remain profitable, you absolutely, positively need to distinguish your products and/or services from your competitors. In other words, you need to make your business special in the eyes of your clients: You need to create a Unique Selling Proposition, or USP.So what is a USP?Simply put a USP is
When marketing a product or service, businesses find it difficult to set their prices. Too high, and no-one will buy, too low, everyone will buy, but you will go broke. So how do you set your prices?The basic principle of pricing is that you should set your prices as high as the market will allow. But what does that mean? (You may not decide to do this for other marketing reasons such as trying to buy customers, or offering an introductory price to enc
The generic technique of recency analysis, has to be adopted to the different context of every Business: unique Customer lifecycle, product type. In this article we examine the important case of subscription based (or continuity) services. Such services involve the continuous usage by a Customer, often based on a contract. Common examples are: bank accounts, credit cards, fixed & mobile telecommunication services. These services are offered in highly competitive markets, characterised by high customer switching (attrition or churn) rates, which erode the profitability of those who suffer it.
The selection of suitable measurements for recency is not obvious, in the case of continuity services. A bank account or a telephone subscription is potentially used every day, therefore ‘last time used’ cannot normally be the basis for a recency measurement. The fact that the service is used, does not reflect an active choice of the Customer to interact with the Business. Therefore one should try to identify those events which reflect ‘an active choice of the Customer to interact with the Business’. Moreover, these events should be divided into events reflecting a positive attitude of the Customer towards the business and a predisposition to strengthen the relationship with the Business (e.g. a service upgrade) and events reflecting an increasingly neg
"Only the overall review of the entire business as an economic system can give real knowledge" - Peter F. DruckerNo one needs to emphasize the holistic approach the Six Sigma deployment takes on overall business processes. All processes in an organization present at least one opportunity for improvement. Having a limited picture about the limitations of Six Sigma and its applications projects an all together different picture.At the enterprise l
The generic technique of recency analysis, has to be adopted to the different context of every Business: unique Customer lifecycle, product type. In this article we examine the important case of subscription based (or continuity) services. Such services involve the continuous usage by a Customer, often based on a contract. Common examples are: bank accounts, credit cards, fixed & mobile telecommunication services. These services are offered in highly competitive markets, characterised by high customer switching (attrition or churn) rates, which erode the profitability of those who suffer it.
The selection of suitable measurements for recency is not obvious, in the case of continuity services. A bank account or a telephone subscription is potentially used every day, therefore ‘last time used’ cannot normally be the basis for a recency measurement. The fact that the service is used, does not reflect an active choice of the Customer to interact with the Business. Therefore one should try to identify those events which reflect ‘an active choice of the Customer to interact with the Business’. Moreover, these events should be divided into events reflecting a positive attitude of the Customer towards the business and a predisposition to strengthen the relationship with the Business (e.g. a service upgrade) and events reflecting an increasingly ne
Are you an El Monte homeowner or business owner who has a mold problem? If you do, you will want to have the mold removed from your home or your business. This process is often referred to as mold remediation or mold removal. If you are interested in having the mold in your home or business professionally removed, which you should be, you will need to find an El Monte mold remediation specialist to do business with.When it comes to finding an El Monte
The selection of suitable measurements for recency is not obvious, in the case of continuity services. A bank account or a telephone subscription is potentially used every day, therefore ‘last time used’ cannot normally be the basis for a recency measurement. The fact that the service is used, does not reflect an active choice of the Customer to interact with the Business. Therefore one should try to identify those events which reflect ‘an active choice of the Customer to interact with the Business’. Moreover, these events should be divided into events reflecting a positive attitude of the Customer towards the business and a predisposition to strengthen the relationship with the Business (e.g. a service upgrade) and events reflecting an increasingly ne
Wherever you turn these days you’ll find articles covering every business strategy and tactic available to man, from how to make a great presentation to strategies for success all the way to negotiations and prospecting and getting a client to commit. But hardly anyone touches on the subject of breaking the ice with a new client and winning them over.Experts say it takes only three seconds to make a first impression. That doesn’t give you much time to
The selection of suitable measurements for recency is not obvious, in the case of continuity services. A bank account or a telephone subscription is potentially used every day, therefore ‘last time used’ cannot normally be the basis for a recency measurement. The fact that the service is used, does not reflect an active choice of the Customer to interact with the Business. Therefore one should try to identify those events which reflect ‘an active choice of the Customer to interact with the Business’. Moreover, these events should be divided into events reflecting a positive attitude of the Customer towards the business and a predisposition to strengthen the relationship with the Business (e.g. a service upgrade) and events reflecting an increasingly ne
As a business owner, one of the most important business decisions you'll make is choosing the design of your logo. Whether you design the logo yourself or hire a designer, you'll have to make some decisions during the design process.But you want to make sure that the logo you decide on will work well. Many business owners make the mistake of basing their logo choices on their personal preferences. But your 'likes' should have very little to do with you
Events signalling a positive attitude are:
• An order in general
• An additional order, building up a subscription portfolio (studies in the banking sector have shown that customers with a larger product portfolio, tend to be more loyal than those with a smaller one)
• A service upgrade (e.g. moving to a higher fixed monthly fee contract in mobile telephony)
• An order for a service enhancement, taking advantage of a service feature not used before
• Enrolment to the web channel, offered by the service
• The acceptance of a campaign offer
Events signalling a negative attitude are:
• A complaint
• A product cancellation, reducing the subscription portfolio size
• A subscription portfolio termination
These two event categories of ‘reduced’ and ‘increased’ Customer ‘friction’, should be considered separately, since they have opposite effect. They should not be used in the same metric, since they may be cancelling each other.
Moreover, the selection of the appropriate division of time into recency time periods, can affect the effectiveness of the prediction. These time periods relate to the Customer lifecycle of each product type.
Alternative recency metrics can be tested on their effectiveness, with a test campaign. The best measurement is the one that produces the best response rate prediction. In addition, this metric should yield substantial d
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