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2601 Ocean Park Blvd #104 Santa Monica, CA 90405 | 310-598-6658 | RetentionScience.com
How to keep your holiday customers
...
Matthew Michelson, Ph. D.
Director of Data Science
Retention Science
Today’s speakers
Cara Klewin
Sr. Email Marketing
& CR...
About ALOHA
2015 Holiday season sales
are predicted to be as much
as $965 billion, a 4%
increase over last year’s
shopping season.
Age...
What is Churn?
Churn is…
#holidaychurn
When a customer unsubscribes from your service, ceases to purchase
from you, or simply stops engag...
Why are Customers Churning?
#holidaychurn
1. Poor customer service
Of customers who decide to leave a
company, 70% of them to so because of
poor servi...
• Lifecycle Stages
Overview
#holidaychurn
2. Not enough value
When customers don’t feel they’re
getting value from your br...
#holidaychurn
3. Poor quality communications
You can no longer expect to batch and
blast your customers and get solid resu...
• Lifecycle Stages
Overview
#holidaychurn
4. No brand loyalty
During the holiday season, many
customers buy from brands th...
When a customer feels you’ve let them
down, they’re quick to head to the door.
And with all the online outlets, they’re
ev...
Predicting Churn
v
Now that you know why customers churn, it’s
time to look at how to predict which of your
customers are at risk of churni...
Basic Churn Calculation
You can use Churn Rate to calculate:
• Number of customers lost
• Value of recurring business lost...
Using Data Science to Predict Churn
We assign a churn score to each customer that tells us their probability of
churning.
...
Using Data Science to Predict Churn
#holidaychurn
Retention Science updates 100 million users per day to determine where t...
Markov Churn Model
#holidaychurn
Preventing Churn
Tips for Preventing Churn
• Know who your customer is and if they change throughout the year.
For example, jewelry compani...
How ALOHA re-engages
customers who have
churned
after the Holidays
Win-Back Campaigns
A series of marketing messages with
the core function of bringing a lapsed
customer back into the purch...
Free Shipping or Percentage Off
• Win-Back offer is
dynamically inserted into
emails
• Customers with highest
CFV (Custome...
Pair Content with Products & Offers
#holidaychurn
Give Customers a Choice
#holidaychurn
Giving customers a choice to
discover new products via free
samples is a great way t...
Recap
Avoid Churn this Holiday Season:
#holidaychurn
• There are many reasons your
customers may churn like poor
customer servic...
2601 Ocean Park Blvd #104 Santa Monica, CA 90405 | 310-598-6658 | RetentionScience.com
Questions?
#holidaychurn
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Predicting and Preventing Customer Churn After the Holiday Season

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You acquire many new customers during the holiday season, but what can you do after the holidays to keep those customers engaged and purchasing? Slides from our webinar cover customer churn: what it is and how you can predict (and prevent) it.

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Predicting and Preventing Customer Churn After the Holiday Season

  1. 1. 2601 Ocean Park Blvd #104 Santa Monica, CA 90405 | 310-598-6658 | RetentionScience.com How to keep your holiday customers long after the season is over #holidaychurn + Present:
  2. 2. Matthew Michelson, Ph. D. Director of Data Science Retention Science Today’s speakers Cara Klewin Sr. Email Marketing & CRM Manager ALOHA.com Jon Fox Client Success Manager Retention Science
  3. 3. About ALOHA
  4. 4. 2015 Holiday season sales are predicted to be as much as $965 billion, a 4% increase over last year’s shopping season. Agenda 1. What is churn? 2. Reasons Customer Churn 3. Predicting Churn a) Calculating Churn b) Predictive Models 4. How to Prevent Customer Churn 5. Campaigns That Work Deloitte Report #holidaychurn
  5. 5. What is Churn?
  6. 6. Churn is… #holidaychurn When a customer unsubscribes from your service, ceases to purchase from you, or simply stops engaging with your brand. • Many companies, however, focus on acquisition rather than churn, even though research shows it costs five times as much to acquire a new customer than to keep an existing one. To take the proactive approach of nurturing customers before they churn to keep them engaged and purchasing, you need to look at why customers churn in the first place.
  7. 7. Why are Customers Churning?
  8. 8. #holidaychurn 1. Poor customer service Of customers who decide to leave a company, 70% of them to so because of poor service. How to prevent it: Though the holidays are a busy time, it’ s important to remember to take the time to make customer service a top priority. When customers feel a company really cares about their needs, they are more likely to return the favor.
  9. 9. • Lifecycle Stages Overview #holidaychurn 2. Not enough value When customers don’t feel they’re getting value from your brand, they’re quick to try another brand. How to prevent it: Value is a subjective term for customers, so it’s important to find out what each customer considers valuable. For example, some customers may find free shipping valuable while others want unique product recommendations.
  10. 10. #holidaychurn 3. Poor quality communications You can no longer expect to batch and blast your customers and get solid results. Customers want -- actually demand -- quality communications from brands. How to prevent it: Give your communications a purpose, m ake them relevant to the individual and engage your customers in conversations to improve your overall qu ality.
  11. 11. • Lifecycle Stages Overview #holidaychurn 4. No brand loyalty During the holiday season, many customers buy from brands they don’t usually purchase from when getting gifts. How to prevent it: Give new customers a reason to be loyal to your brand. Create a memorable experience: offer assistance when making first purchases or give incentives for the user to get to know your brand more by following you on social media.
  12. 12. When a customer feels you’ve let them down, they’re quick to head to the door. And with all the online outlets, they’re even quicker to let their networks know about it. #holidaychurn 5. Unmet expectations How to prevent it: Underpromise and overdeliver. Customers are delighted when you exceed their expectations, especially during the hectic holiday season. If you are unable to fulfill a promise, be transparent and remember churn reason #1 – customer service can make all the difference.
  13. 13. Predicting Churn
  14. 14. v Now that you know why customers churn, it’s time to look at how to predict which of your customers are at risk of churning or who have already churned. #holidaychurn
  15. 15. Basic Churn Calculation You can use Churn Rate to calculate: • Number of customers lost • Value of recurring business lost • Percentage of recurring revenue lost #holidaychurn Churn can be tricky to calculate. This is the most basic calculation:
  16. 16. Using Data Science to Predict Churn We assign a churn score to each customer that tells us their probability of churning. Based on scores, users are put into 3 buckets: #holidaychurn 1. Low churn score = “Ready to Buy” - These customers will make a purchase at some point 2. Medium churn score = “At Risk” - These customers might make a purchase, or might churn 3. High churn score = “Churned” - These customers are likely to not purchase again
  17. 17. Using Data Science to Predict Churn #holidaychurn Retention Science updates 100 million users per day to determine where they fall on the churn spectrum.
  18. 18. Markov Churn Model #holidaychurn
  19. 19. Preventing Churn
  20. 20. Tips for Preventing Churn • Know who your customer is and if they change throughout the year. For example, jewelry companies may target women most of the year, but need to change their messaging around Valentine’s Day to target men. • Provide a smooth customer journey from start to finish. Test each stage of the purchasing process yourself to make sure it’s intuitive and easy to follow. • Reward your advocates as they are the most valuable customers you’ll have. Advocates promote your brand to their friends, family, and networks – reward them for providing reviews and getting their friends to become customers. • Time is of the essence when it comes to recapturing customers. The window to recapture interest is smaller than ever, make sure you have a reaction strategy in place to address customer actions.
  21. 21. How ALOHA re-engages customers who have churned after the Holidays
  22. 22. Win-Back Campaigns A series of marketing messages with the core function of bringing a lapsed customer back into the purchasing cycle. Two main components: – Messaging that addresses the reason for lapse – An enticing offer – i.e. a discount on a future purchase or a free month (if dealing with a subscriber)
  23. 23. Free Shipping or Percentage Off • Win-Back offer is dynamically inserted into emails • Customers with highest CFV (Customer Future Value) get best offer #holidaychurn
  24. 24. Pair Content with Products & Offers #holidaychurn
  25. 25. Give Customers a Choice #holidaychurn Giving customers a choice to discover new products via free samples is a great way to re-engage customers for the new year.
  26. 26. Recap
  27. 27. Avoid Churn this Holiday Season: #holidaychurn • There are many reasons your customers may churn like poor customer service and not providing enough value. • Knowing churn rate is useful in calculating the value of recurring business lost • Data science helps predict churn by calculating churn score and bucketing customers into three categories: Ready to Buy, At Risk, and Churned • The Markov model is one model Retention Science uses to predict the probability a customer will make another purchase. • To prevent churn: Know your customer, provide a smooth customer journey, reward your advocates, & timing is everything • Win-Back campaigns are a great way to re-engage customers who have churned
  28. 28. 2601 Ocean Park Blvd #104 Santa Monica, CA 90405 | 310-598-6658 | RetentionScience.com Questions? #holidaychurn

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