Every customer provides a wealth of information and as a result, many opportunities for the service provider to improve their experience and extend their customer lifetime value. In this article, we look at how data-driven campaigns are win-win for both the customer and the service provider.
As we’ve explored in previous posts, advanced analytics can be used to improve sales processes and help communications firms acquire new customers. They can also help service providers derive more value from existing customers. Using statistical methods to determine which products are right for which customers (e.g. those used to develop a product recommendation engine), an improved customer experience can be extended to the entire customer base, which leads to analytics-driven sales growth for the service provider.
Improving the Customer Experience with a Data Driven Approach to Upselling
In a typical communications service provider’s sales process, once a customer has started using a product, sales teams have the opportunity to collate additional data about them. Here, customer needs can be assessed by evaluating both the customer’s characteristics and their usage patterns. By doing this, sales teams have the opportunity to identify customers that were initially undersold, as well as those whose needs have changed, then initiate discussions to put them into more appropriate packages - enhancing the customer experience.
The following examples demonstrate how these types of upsell opportunities can be identified with advanced analytics:
Customer-Bundle Mismatches: By using advanced analytics to compare customer lifetime value and customer satisfaction levels (e.g. NPS scores) for different product bundles, held by different consumer segments, sales teams can determine which bundles are performing best within each segment. As a result they can then identify any customer-bundle mismatches, and work to remediate these through targeted upsell campaigns.
Changing Needs: With advanced analytics, product usage data across enterprise customers can be analyzed and sales teams can identify instances where customers are frequently reaching the limits of their services (e.g. bandwidth allocations), suggesting a higher tier service might be more appropriate and provide a better experience. These customers can be engaged with a specific focus on their pain points, which will have a higher likelihood of resonating and resulting in successful upsell.
Deploying these types of data-driven upsell campaigns is a win-win for both customers and the service provider. The analytics will help identify customers who likely have unmet needs and would be more satisfied with additional products and services. An insightful upsell solves a pressing problem for the customer.
Addressing these unmet needs has many benefits to the service provider. Before the upsell, these customers had an above average risk of churning and were unlikely to be brand advocates. After the upsell, the service provider can be rewarded with:
Increased monthly revenue and extended customer life, thereby improving the customer lifetime value, as a result of correcting the product mismatch;
Increased customer satisfaction metrics, such as NPS scores, from the customer's improved product experience; and finally,
Improved sales team's productivity through targeting upsell resources in areas with the highest likelihood of success.
Reducing Churn and Increasing Customer LTV with Analytics Insight
The benefits of these types of campaigns can be measured and evaluated by running a trial among a test group and comparing the results – upsell rates, NPS scores, churn rates, average customer lifetime value – to a control group of customers with the same characteristics and product subscriptions. These results can be quantified in terms of the financial upside or other strategic objectives, and if the case is compelling, the campaign can be extended to the entire control group.
Service providers that continuously develop and test these types of data-driven hypotheses, and then deploy the most effective ones, will continuously outdo their competitors by having greater sales success and more satisfied loyal customers.