Retention Calculators are the tool by which you estimate the value of your customer when they ring up to cancel. But which customers do you keep?
This article examines the tool, the setup and the options available in creating a retention calculator.
For operations and contact managers alike developing a retention calculator can not only save thousands but it can radically change how you interact with your customers.
- The Basics
- Getting started
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I was introduced to this concept by some “thought giants” in the Irish telecommunications industry for whom I have huge respect and their careers speak for themselves.
|Mark Simmonds||Jakub Dombek||Dee Norton||Ailish Durkin|
|Linked In||Linked In||Linked In||Linked In|
I also discovered not all customers are equal. Some do an awful lot more business with your company than others.
Yet every customer deserves the same level of respect in your interactions.
Welcome to the mobile phone store
This is an imaginary story to highlight what could happen. It does not relate to any specific customer past or present. I use this fictional scenario for training and quality purposes.
Imagine a mobile phone store in a busy supermarket. Two customers walk in the door. Both customers want to cancel their account.
The first customer is a man in his late 50s. Quiet and unassuming. He’s holding the technology equivalent of a brick.
He says he wants to cancel his account.
The second customer is in their late teens / early twenties.
Sighing and gesticulating and obviously agitated, the man is chatting loudly and critically to their friend about the service they’ve received.
The sales advisor thinks, this could escalate and isn’t good for business. I can get rid of this quiet customer quickly and get to the loud customer.
A smart phone is not going to appeal if he’s using a brick. So with a frustrated flurry the sales advisor cancels the account and encourages the quiet customer out of the store.
The second customer is a lot louder and in the sales advisors face. Almost shouting the shop down at this stage, the second demands an upgrade to retain their account.
Rather than deal with the hassle the advisor gives the customer the latest iPhone on free upgrade and goes on with their day.
Turns out the first customer was the head of a taxi company who the next day promptly cancelled 300 accounts for lack of service and respect.
A contract worth tens of thousands of Euros. He just happened to walk by the store and wanted to see how he was treated.
The second customer was a student who was 2 months into their pay as you go contract.
When a new phone came out, the student wanted it and was chancing their arm!
A very bad day for the telecomms company, what could have helped the sales advisor?
The primary issue
The primary issue was lack of information at the right time.
The easiest solution was to have a system in front of the advisor which prompted them.
This information allows the advisor to make an informed decision.
This is where retention calculators comes in.
When to hug a customer and when to push away.
Don’t get me wrong there is plenty of other soft skills that the sales advisor could have used.
Problem solving, adaptability, creativity and interpersonal skills all could have featured.
Yet every one of those skills hinge on one important point. Having facts and knowing what to do with them.
However when you’re faced with real world situations and put under stress, tunnel vision can happen.
Mistakes happen in pressure situations. As Mike Tyson said… “Everybody has a plan until they get punched in the mouth”
The first part of the solution is having data in real-time that is up to date.
Yes you can work off an Excel sheet but the sheer mind boggling risk of keeping customer data in solutions that are not secured is a non-starter.
Your business will probably have tons of data, so it’s the key data quickly is what’s required.
The best solution I’ve seen implemented is an internet based system that is secured that has up-to-date data in it.
This system also can provide sales objection, prompts for handling objections, competitors comparisons and up to minute news where appropriate.
Rules and Legals
No customer wants to be put in a box and doing that is dangerous.
If you create boxes, you need to keep the boxes up to date.
If a customer makes a data access request you don’t really want to be explaining why you have them in a category called “easy money!”
So there is a very simple approach.
Making the rules
Get your senior sales people and the ones who are really good at retention and ask them for how they convince customers to stay.
What are the key bits of information they seek in order to stop a customer leaving.
Is there anything in particular to look for in their process and then what skills are applied to make it happen.
Write the rules down and now you have the two key elements, data and rules for making decisions.
You have a choice. Build the rules into Excel. Yes they can get complicated but it’s not possible.
When the customer walks in, or calls your contact centre, the agent looks up their data, plugs it into the retention calculators and the system computes the best option.
Time is a massive challenge with this route. If you have to look up data from around a number of systems or places this becomes unwieldy to use in real-time.
Also when you use Excel and your rules change for new offers, etc. making sure everyone gets the update is challenging.
Instead, online systems like bxp software let you build the rules in the tool which does the leg work and instantly presents the solution to the customer.
Your teams can change the rules during the day. Consequently you don’t store data points about the customer categorisation.
This really works and is why it was so successful in real-world operation.
So if you have legacy tools and your data is around numerous systems tools like a data warehouse become very handy.
You pump all your data into a single source. This can be a data warehouse, a CRM (Customer Relationship Management) or an ERP (Enterprise Resource Planning) solution.
From there you can create rules and use data mining techniques to create rules.
This can generate very advanced rules and it uses data science rather than peoples feelings on how to retain customers.
You build your rules into your online tool. As a result, applied in real-time to the data, these rules flag the customer as “guest, valuable, most important” or however you want to classify them.
I’ve seen levels (1,2,3,4, etc), colours (platinum, gold, silver, bronze, etc) and profiles (student, corporate, personal, professional, etc.)
So did your rules help save the customer or not?
Not only that but using a good data capture system will also allow you to feedback the results of your rules to help refine them.
This kind of quality feedback loop enables you to refine retention calculators.
You can find better ways of saving customers and even potentially upselling / cross selling them you didn’t know about today.
The scenario with the tool
When the sales advisor now greets the same two customers there is a very different scenario.
The older gentleman is “Platinum VIP” instantly flagging better service.
“Could you wait here a second sir. You’re a very important customer to us and I want to see you properly dealt with.”
Get the details from the student and instantly know “Still in contract” and worth €20 per month.
“Thank you for your business sir. I’m sorry but you’re still in contract and there’s nothing I can do for you under your current contract. I have to deal with this gentleman and you are more than welcome to review the phones available in the store where we can try sort a deal out for you.”
The difference using soft skills when you have the key information.
On your marks…
In my experience, if you have the data and you create an initial pass at some rules can take about a week in work.
That means next week you could have your retention calculators up and running.
On an ongoing basis every solution I’ve worked with, the client manages the rules and updates them as they see fit.
Inclusion of person-centric marketing permissions and best next action lead the solutions to become the premier way to deal with a customer.
Building in a feedback loop to review how well the retention calculators work makes the process even more effective.
Help your teams in the field and in the contact centre give the level of service your customers deserve no matter what level they’re at.
Where is your retention calculators?
If there’s anything in this article you’d like to chat to me about you can contact me here or on social media.