Retain High-Value Customers
By the time you read this paragraph it's highly probable that a good consumer has found a competitor's offer so enticing that he or she switched businesses. To speed things up, the customer simply closed the account in self-service with a button-click.
This is just one example of the millions of customer attrition scenarios that are playing out every day in today's customer service centers. And attrition rates are growing, which is making companies extremely concerned. In fact, 86 percent of today's executives stated that finding a way to identify high-value customers who are most likely to churn is one of their critical objectives, according to a Teradata study.
Companies have worked hard and spent significant resources to attract customers and yet at some point, for some reason, a percentage of their customers will decide to end the relationship and move on to a competitor. What's more, today a growing number of customers are churning in automated self-service, without companies even knowing they're losing a customer until he gone (a.k.a.: silent attrition).
Automated self-service has been among the biggest revolutions in customer service over the past few decades, thanks to its ability to accelerate service and lower agent costs. However, self-service applications have become the proverbial double-edged swords in today's inbound contact centers. Today customers can not only get their questions answered and problems resolved without ever talking to an agent, but they can also close their accounts with the push of a button.
Today, a critical question facing inbound call centers is: Can we meet our business objectives and keep high-value customers from churning in self-service? The answer is yes
--if they approach the problem in a new way.
Low-Value Approach--Reactive and Untargeted
Today inbound calling retention strategies are largely reactive and untargeted. The reactive response is triggered when an agent decides that a customer is unhappy. At this point, the agent hot transfers the customer to the specialized retention group. There are three serious flaws with this approach:
Gauging customers' risk levels is put in agents' hands.
Transferring the call to a second agent adds to call handling costs, often putting pressure on the retention agents to pitch higher priced offers.
Transferring the customer to a second agent may further aggravate him--and make it even easier to churn.
Without a proactive system to identify which callers are at risk for attrition, the customers either close their accounts in self-service or are sent to general queues. What's more, not all customers are equal and, therefore, are not all worth saving. In particular, some low-value customers may actually be costing your company money. Therefore, letting them churn may be a smarter strategy than spending valuable agent resources to keep them.
As a result, a reactive and untargeted retention program leads to counterproductive outcomes, including:
the cost of handling and making offers to perceived attrition risks increases, while customer satisfaction declines; and
high-value customers constantly slip through the cracks and, as a result, may close their accounts with the click of a button, without ever talking to an agent. Meanwhile, your agents are spending valuable time making offers to low-value customers.
High-Value Approach--Proactive and Targeted
Today there is a proactive and targeted solution to the mounting problem of customer attrition in self-service--applying predictive analytics in real time to call routing. The predictive applications pull relevant data to determine customers' future values and behavior as they arrive--and before they can self-select their service levels. The applications then assess all inbound callers' profitability and propensity to respond to offers, and balance customers' overall needs with the call center's resources. They then route all callers to the appropriate service levels.
By changing their retention approach from reactive and untargeted to proactive and targeted, inbound call centers can use the vital customer data they already own to intelligently predict customers' future value and risk of attrition at the time of the inbound call. As a result, they can:
save more high-value customers from attrition;
build stronger customer relationships via targeted retention offers; and
allow low-value, high-cost customers to close their accounts.
With this predictive capability, inbound call centers finally gain the ability to proactively target their high-value customers with intelligent retention strategies--before customers can simply click a button to disconnect the relationships.
About the Author
Robert Tate is the vice president of marketing at Austin Logistics. Tate has more than 10 years of experience in call center management and operations. He has held executive-level positions at leading call center hardware and software technology firms. Tate holds an undergraduate degree from the University of Southern California and a graduate degree from Duke. He can be reached at firstname.lastname@example.org