Many organizations believe that, once a prospect becomes a customer, the nurturing process is complete when in fact the process has just begun.
In the early phases of a customer’s life, companies must leverage key information (e.g., behavioral data, prospect data, campaign and response information, etc.) in order to develop an accurate projection of customer value growth potential over time.
More importantly, this information guides the organization in its efforts to maximize customer profitability, minimize churn, and assess the customer’s ongoing needs and priorities. By providing a personalized and powerful customer experience, Customer Chemistry helps companies enhance satisfaction, strengthen loyalty and lay the foundations for enduring profitability.
Critical Success Factors
Consider the Critical Success Factors associated with successfully on-boarding and nurturing early lifecycle customers:
- Address customer challenges early in the customer lifecycle to reduce churn and increase customer satisfaction. It is important to identify the likely pitfalls a customer may encounter early in their lifecycle. Moreover, early warning signs of customer dissatisfaction must be defined early (which may not be obvious or attainable through raw data). Finally, appropriate treatments for addressing an individual customer’s needs and challenges must also be defined and implemented.
- Identify fraud and other unwanted behavior early. To avoid the damage associated with fraudulent activity, it’s important to identify and isolate potential threats early on. Moreover, companies must rapidly identify customers that are likely to prove unprofitable or undesirable due to poor payment behavior, high propensity to defect or other undesirable factors.
- Recognize that not all new customers will act uniformly. With this in mind, companies must define the right set of products and services to offer early in a customer’s life to increase both long-term satisfaction and long-term profitability. Moreover, companies can identify the right order and periodicity of additional products and services to sell to a new customer. And, finally, they can define proper on-boarding communication with the customer relative to messaging, interval and channel.
Customer Chemistry’s Approach
With respect to customer on-boarding, Customer Chemistry includes profit migration and product mix relevance assessment in its approach.
Profit migration analysis helps companies understand how to maximize current profit streams. In this first graphic below, ways of migrating new customers upwards in the value chain are analyzed, while also minimizing downward migration.
This approach provides a baseline for identifying customers that migrate between value segments, as well as those that remain within the same segments for extended periods. More importantly, it reveals the root causes of migration between value segments and enables organizations to use this information to positively affect the migrators.
Imagine a telecom services customer is enticed to purchase a “triple play” offering through an attractive offer. If the prospect is insufficiently educated about the benefits of the offer relative to existing alternatives, then that customer is unlikely to migrate. Using our techniques to shed light on the root cause – gaps in customer education and awareness in this case – would have turned the failed initiative into a success.
Another critical element in successful on-boarding involves ensuring that customers have the proper mix of services to maximize customer satisfaction.
Customer Chemistry’s approach provides the foundation for assessing the effect of product mix on specific segments to increase current profit streams. By reviewing the product mix of individual segment clusters, organizations can evaluate how each product mix contributes to or detracts from profitability and customer satisfaction.
Take a banking example. A deep analysis of the services, account balances, and other behavioral data associated with a bank’s customers in each value segment might provide insight on how different product mixes positively and negatively affect customer longevity and profitability.
In this case (see graphic below), the bank might be interested in reviewing which services within a bundle tend to cannibalize one another and, therefore, fail to increase customer wallet share.
Customer Chemistry can help banks assess the various dimensions of customer on-boarding and develop approaches that produces superior outcomes.
Customer Chemistry draws on proven business expertise, deep industry experience and winning practices in marketing analysis and execution to help our clients generate profitable growth. If you are exploring ways to profitably manage customer on-boarding, contact one of senior client representatives today at 571-643-0840.