The importance of service modernization has become increasingly important as the economy begins to scale. Service providers are modernizing and expanding at a rate that we have never experienced. Improving customer experience comes top of mind for many leaders in the service space.
However, the attempt to modernize your service business means you will have to solve some of the challenges that many leaders face, such as the inability to really understand your customers, the disconnect between your employees and your customers, and the lack of visibility into important business insights.
Our world has changed both culturally and technologically as organizations modernize their platforms, processes, and the way they consume their information. Digital transformation allows organizations to be more agile in our new environment and enables them to maximize the value of their data investments.
The powerful capabilities of data analysis
Three capabilities that come to mind when thinking about this data revolution are churn aversion and churn analytics, churn segmentation, and retention activity impact analysis.
Being able to identify key factors impacting customer spend decline, and generate predictive models to detect churn early is highly effective for retaining customers.
Churn analytics can be used to measure the rate at which customers are quitting your product or service. It helps organizations to stop the proverbial leaking of the bucket of customers by surfacing critical insights such as customer health, spend trends, and retention scoring for service leaders.
Reducing customer churn is more cost-effective than acquiring new customers
Many businesses prioritize customer acquisition because the thought process is that “more new customers means more revenue.” However, customer acquisition as the sole focus can be a costly endeavor. By incorporating churn analytics and churn aversion capabilities you allow your organization to prevent revenue loss, decrease the cost of retention efforts, reduce marketing and sales costs, and provide better customer experience for your existing customers.
Defining churn and customer segmentation
Other external factors impact churn for organizations as well, but being able to attribute and predict due to market pressures allows organizations to focus amelioration efforts on avoidable churn. Defining churn and customer segmentation can help organizations to predict behaviors and analyze churn metrics.
Doing a thorough customer churn analysis of your customer base allows you to not only comprehend what their behaviors will look like in the present, but also determine what their customer lifetime value will be in the future. By utilizing churn segmentation capabilities you can predict your volume at risk of churn, perform revenue time series forecasting, and identify market-driven churn vs. wallet share decline.
Retention activity impact analysis
The final capability to discuss is retention activity impact analysis. Not only is retaining customers an important strategy, but understanding how important activities that affect retention can be in retaining said customers. In the past, predictive analytics technology had many limitations when it came to accurately predicting individual customer recommendations. Agents struggled to resolve cases because each case had unique concerns.
Today, tools such as “next best action” enable customer service agents to make educated decisions based on data in real-time. Providing service reps with actionable insights around recommended next actions, analyzing predictive expected return of retention activities, and NPS scoring and CSAT improvement creates a healthy strategy.
Infographic: Preventing customer churn
Here is a helpful infographic using a hypothetical service business example to demonstrate the importance of customer churn analytics. We mapped out the entire customer journey and listed the various analytics tools involved to solve the problem.
Get in touch to learn more about how Atrium can help your organization get started with service modernization.