Retention Marketing at the Boston Globe

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Retention Marketing at the Boston Globe

  1. 1. Retention Marketing At the Boston Globe
  2. 2. Retention Marketing Purpose and agenda <ul><li>Get familiar with Retention Marketing (RM) at the Boston Globe </li></ul><ul><li>RM campaigns </li></ul><ul><li>Future RM projects </li></ul>Purpose Agenda <ul><li>Formation of Relationship Marketing Group (RMG) </li></ul><ul><li>Current RMG Campaigns </li></ul><ul><li>credit card conversion campaign </li></ul><ul><li>sequencing campaign </li></ul><ul><li>prepaid campaign </li></ul><ul><li>extend discount terms campaign </li></ul><ul><li>Customer Attrition Model </li></ul><ul><li>Future Work of RMG </li></ul><ul><li>Q&A </li></ul>
  3. 3. Agenda Customer Attrition Model Current RMG Campaigns Formation of RMG Future Work of RMG Q&A
  4. 4. Formation of RMG – A Blended Call Center/Customer Service Environment Four Basic Principles of RMG <ul><li>Nurture a lasting relationship </li></ul><ul><li>Convert traditional payment by bill to auto-payment or Prepay </li></ul><ul><li>Prevent stops before they happen </li></ul><ul><li>Reward loyal customer </li></ul>Current RMG Campaigns: Stop Saves, Upgrade, Credit Card Conversion, Overdue/Non-pay, Winback/Expired calling/mailing, New Start welcome calling/mailing, Globe Rewards etc.
  5. 5. Agenda Current RMG Campaigns Formation of RMG Future Work of RMG Customer Attrition Model Q&A
  6. 6. Current RMG Campaigns - Credit Card Conversion <ul><li>Overview </li></ul><ul><li>37% of new starts from Telemarketing come with credit card payment monthly </li></ul><ul><li>50% active subs pay by credit card </li></ul><ul><li>Why are we interested in credit card payment ? </li></ul><ul><li>one-year retention rate is 43.8% higher for new starts from Telemarketing channel who pay by credit card vs. those do not </li></ul><ul><li>Credit Card Conversion Model </li></ul><ul><li>Simple model did in Analytix to identify potential variables that drives credit card conversion </li></ul><ul><li>Get basic profile of credit card payers; applied the profile to non-credit card payers </li></ul>
  7. 7. Current RMG Campaigns - Credit Card Conversion (Cont’d) <ul><li>Basic profile of active subscribers who pay by credit card </li></ul>
  8. 8. Current RMG Campaigns - Credit Card Conversion (Cont’d) <ul><li>What we learned from basic profiling ? </li></ul><ul><li>Subscribers who are intensive internet users are more likely to use auto-payment </li></ul><ul><li>Subscribers who have tenure between 0 to 6 years are more likely to use auto-payment </li></ul><ul><li>Subscribers who are aged between 40 to 59 years old are more likely to use auto-payment </li></ul><ul><li>Subscribers whose household income is greater than $70K are more likely to use auto-pay </li></ul><ul><li>Subscribers who are on 7-day delivery map are more likely to use auto - pay </li></ul><ul><li>Segmentation </li></ul>
  9. 9. Current RMG Campaigns - Credit Card Conversion (Cont’d) <ul><li>Apply profile of auto-pay subscribers to non-auto payers </li></ul><ul><li>RMG called two files on 7-day and Sunday only subscribers </li></ul><ul><li>Sales/contact rate increased by over 3 times compared to that from old segmentations, which basically called everyone who is not auto-payers </li></ul><ul><li>Results </li></ul><ul><li>Another successful story from Telemarketing acquisition on Credit Card Payment </li></ul><ul><li>Patriot T-shirt Offer awarded new starts from TM acquisition paying by credit card with a free T-shirt </li></ul><ul><li>Generate a 22% higher acquisition rate of credit card payment than giving 4 additional weeks of free subscription </li></ul>
  10. 10. Current RMG Campaigns - Credit Card Conversion (Cont’d) <ul><li>Conclusions </li></ul><ul><li>Credit card payment is critical to TM acquisition and retention </li></ul><ul><li>Simple modeling by subscribers’ profile will help increase credit card conversion rate </li></ul><ul><li>Premium offer generates higher credit card conversion than does longer discounts periods or free </li></ul><ul><li>additional weeks </li></ul>
  11. 11. Current RMG Campaigns – Sequencing Winback Direct Mail/Calling Sequencing
  12. 12. Current RMG Campaigns – Email Campaign <ul><li>Overview </li></ul><ul><li>The Globe has 300,000 + email address, </li></ul><ul><li>100,000 subscribers’ email address </li></ul><ul><li>44,000 opt in subscribers </li></ul><ul><li>82% of opt-in with email addresses </li></ul><ul><li>72% are 7 day subscribers </li></ul><ul><li>Major Source of Emails </li></ul><ul><li>Boston.com </li></ul><ul><li>The Globe Services </li></ul><ul><li>The Boston Globe Rewards </li></ul><ul><li>PBS (Circulation system) </li></ul>
  13. 13. Current RMG Campaigns – Email Campaign ( Cont’d ) <ul><li>Conclusions </li></ul><ul><li>Email campaign costs much less than direct mailing or telemarketing </li></ul><ul><li>Email campaign generates much better upgrade rate than tradition direct mailing </li></ul><ul><li>First Globe Upgrade Email Campaign </li></ul>
  14. 14. Current RMG Campaigns – Prepaid Campaign <ul><li>Objective </li></ul><ul><li>Bring more subscribers to long-term payment plans for 13, 26, 52 week terms </li></ul><ul><li>Build long-term customer retention </li></ul><ul><li>Profile of Prepaid subscribers </li></ul><ul><li>77% of prepaid subscribers are on 52-week term; 22% are on 26-week term </li></ul><ul><li>88% prepaid subscribers have tenure of over 2 years </li></ul><ul><li>80% prepaid subscribers are on 7-day map </li></ul><ul><li>Majority of prepaid subscribers are seniors </li></ul><ul><li>Methodology </li></ul><ul><li>Direct mailing or RMG calling to active subscribers for prepayment </li></ul><ul><li>Results </li></ul><ul><li>1.1% response rate of converting to pre-payment out of 1.5 million direct mailing, RMG </li></ul><ul><li>calling and inserts </li></ul>
  15. 15. Current RMG Campaigns – Prepaid Campaign ( cont’d ) <ul><li>Retention of Prepayment subscribers </li></ul><ul><li>Conclusions </li></ul><ul><li>Overall attrition rate for prepay subscribers is 0.6% compared to that of 9.3% for non-prepay group </li></ul><ul><li>For credit card payers, attrition rate of non-prepay group is less than that of pre-pay subscribers </li></ul><ul><li>It is more important to get subscribers auto-pay by credit card than to get them pre-pay </li></ul>
  16. 16. Current RMG Campaigns – Discount Extension Campaign (Extendo) <ul><li>Objective </li></ul><ul><li>Increase retention rate on new subscribers by extending their initial discount terms </li></ul><ul><li>Methodology </li></ul><ul><li>Extending initial discount offer period to longer terms </li></ul><ul><li>Target at subscribers on 25%, 50%, 75% off regular rates, and extend their offer terms </li></ul><ul><li>Results </li></ul>(Results were calculated after two month of campaign being launched)
  17. 17. Current RMG Campaigns – Extendo Campaign (Cont’d) <ul><li>Conclusions </li></ul><ul><li>Average two-month attrition rate for Extendo campaign is 9.1% vs. 22% for Control group </li></ul><ul><li>Retention is 2.5 times favorable for Extendo compared to that of Control group </li></ul><ul><li>Retention is most favorable for new subscribers with tenure of less than 6 months </li></ul>
  18. 18. Agenda Current RMG Campaigns Customer Attrition Model Formation of RMG Future Work of RMG Q&A
  19. 19. Customer Attrition Model - Customer Dynamics at The Globe Subscribers Prospects DM TM 250 k / year 240 k / year Developments with TM legislation further increases importance of retention Acquisition and Retention are VERY leveraged improvement opportunities
  20. 20. Customer Attrition Model – Objective What are we trying to predict Independent of: What the install channel was How long they’ve been a customer What product they currently have What discount they are on Probability of attrition during a 6-month window Time of scoring
  21. 21. Customer Attrition Model – Overview of Variables <ul><li>Non-voluntary attrition excluded – excluded stop reasons of Deceased, Hospitalized, Non-payment, etc… </li></ul><ul><li>Sample of 50,000 used for modeling </li></ul>Definition of Attrition <ul><li>Data sources: Customer Database – (Subscriber, Transaction, Suppression), TM Workstation (History, Suppression) Donnelley Marketing </li></ul>Data Used <ul><li>Logistic regression is the technique due to the discrete choice nature of the model </li></ul>Technique <ul><li>The dependent variable is defined as the probability that a given customer will attrite sometime during the next 6-month window </li></ul>Defining the Dependant Variable Customer Attrition Model
  22. 22. Customer Attrition Model – Drivers of Attrition Summary of final model variables Higher Likelihood Factors Lower Likelihood Factors <ul><li>Number of times customer has been on a STOP TM campaign </li></ul><ul><li>Canceled for Billing, Service, or Proactive reason (No time, prefer other paper, etc…) </li></ul><ul><li>Internet Usage Likelihood </li></ul><ul><li>Number of times TM Home Delivery campaign and the result was a SALE </li></ul><ul><li>Number of times TM disposition Refusal – Hung Up </li></ul><ul><li>Canceled at end of promotion </li></ul><ul><li>Number of times TM disposition Refusal – Reads Competition </li></ul><ul><li>Log of Total number of payments </li></ul><ul><li>Likelihood of teenager in household </li></ul><ul><li>NY Times Subscriber </li></ul><ul><li>Most recent TM campaign was an Upgrade offer </li></ul><ul><li>Home Value - $175K+ </li></ul>
  23. 23. Customer Attrition Model – Model Performance Lift chart for final model
  24. 24. Customer Attrition Model – Model Performance (Cont’d) Gains chart for final model
  25. 25. Customer Attrition Model – What Now? Uses for the Customer Attrition Model <ul><li>Identify churner or discount junkies </li></ul><ul><li>Identify loyal customers who are most likely to attrite </li></ul><ul><li>Identify subscribers who are on full-price rate and are most likely to attrite </li></ul><ul><li>Identify non-pay subscribers who are most likely to attrite </li></ul><ul><li>Identify all other “at-risk” subscribers </li></ul><ul><li>Target Retention Programs </li></ul>Campaigns for the Above Targets? <ul><li>Get more on credit card payment or long-term pre-payment </li></ul><ul><li>Extend discount offers </li></ul><ul><li>Differentiated offers to different targets </li></ul><ul><li>Final bill notice </li></ul><ul><li>Overdue and no-pay calls </li></ul>
  26. 26. Customer Attrition Model – An Example of NonPay Stop <ul><li>Increase retention rate by prevent non-payment stops </li></ul><ul><li>Objective </li></ul><ul><li>Convert subscribers who have multiple non-pay histories to prepayment or credit card payment </li></ul><ul><li>Overdue/non-pay calling </li></ul><ul><li>Final bill notice by invoices or in paper </li></ul><ul><li>Methodology </li></ul><ul><li>Results </li></ul>Mailing final notice is the most effective to have subscribers to pay overdue or non-pay balance
  27. 27. Customer Attrition Model – An Example of NonPay Stop ( Cont’d ) <ul><li>Non-pay Subscribers by Customer Attrition Deciles </li></ul><ul><li>Top 5 customer attrition deciles captured over 72% non-pay stop subscribers </li></ul><ul><li>Top 5 attrition deciles captured 62% of all attritors with small amount of balance due </li></ul><ul><li>at non-payment stop </li></ul><ul><li>Conclusions </li></ul>
  28. 28. Agenda Current RMG Campaigns Future Work of RMG Formation of RMG Customer Attrition Model Q&A
  29. 29. Future Work of RMG <ul><li>Predictive model of credit card conversion </li></ul><ul><li>Identify variables that drives credit card conversion </li></ul><ul><li>Predict the likelihood of non-credit card paying subscribers converting to credit card payment </li></ul><ul><li>Increase overall retention by getting more subscribers/prospects to credit card payment </li></ul><ul><li>Expired Model </li></ul><ul><li>Predict the likelihood of former subscribers to come back </li></ul><ul><li>Identify variables that most drive expires to come back </li></ul><ul><li>Identify differentiated offers that most likely to get expires to come back </li></ul><ul><li>Customer Segmentation </li></ul><ul><li>Better understand Globe’s subscribers’ profile </li></ul><ul><li>Target campaigns at the right group of audience </li></ul><ul><li>Preliminary thoughts : new subscribers, chronic churners, loyal subscribers, seniors, </li></ul><ul><li> seasonal subscribers… </li></ul><ul><li>Upgrade Model </li></ul><ul><li>Predict the likelihood of subscribers to be upgraded </li></ul><ul><li>Identify variables that most drive upgrade </li></ul><ul><li>Identify differentiated offers that most likely to upgrade subscribers </li></ul>
  30. 30. Future Work of RMG – Summary Potential next steps for the Boston Globe DM / CRM Capabilities Customer Attrition model can impact decisions for Offer Management, CVM, and ultimately, LTV Level of Sophistication and impact Low High High Customer Attrition model can impact decisions for Offer Management, CVM, and ultimately, LTV Channel Optimization Market to prospects with a combination of likelihood to respond AND retain Customer Value Management LTV Optimization Predictive Models Market to likely responders, based on channel. Independent decisions Offer Management Build on targeting optimization with offer management. Offer discounts where needed and appropriate Cross-Channel Optimization Make cross-channel decisions based on likelihood to respond, stay, and cost per sale
  31. 31. Agenda Credit Card Conversion Q & A Formation of RMG Future Work of RMG Customer Attrition Model

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