Hi-tech enterprises

Predicting and preventing customer defection and improving lifetime value

Smart Vision works with a number of hi-tech customers including mobile telephone network providers, manufacturers of consumer hardware and software development companies. The vast majority of this work focuses on customer understanding and propensity modelling with the aim of improving customer retention as well as providing broader analytical support for marketing activities.

How likely is it that a customer will cancel a contact?

In hi-tech, as in many businesses, the cost of acquiring new customers is high relative to the returns received in the early stages of the relationship. It is important to keep valuable customers for as long as possible in order to recoup the investment in their acquisition.

We work with mobile telecommunication providers, both in the UK and overseas, to help them build models that predict the likely risk of customers terminating a contract. We do this by detecting and confirming patterns of behaviour that indicate likely defection whilst leaving the business enough time to intervene and change the outcome.

Modelling like this can also be used to identify customers who are not profitable and may be costing the business money to serve, in which case the decision can be made not to intervene if the customer looks likely to defect.

Our experience with mobile telecommunications shows that the combination of socio-demographic data, billing data, tariff data, transaction/interaction data and usage data creates an incredibly powerful source of information that readily lends itself to the development of high accurate propensity models.

It’s all very well knowing but how do you do something about it?

Models can be developed that give organisations the opportunity to intervene when customers look likely to defect, but how can a hi-tech business actually change the outcome? The key to this part of the challenge is deployment. Using tools such as IBM SPSS Collaboration and Deployment Services it is possible to deploy a model at point of interaction which, crucially, automatically triggers a planned action or intervention that will make the customer more likely to stay.

What are the benefits?

Our customers are realising significant,measurable finanacial benefits through the application of predictive analytics in their businesses.

  • Reductions of up to 30% in customer churn / defection rates
  • Improvements of up to 60% in return on marketing investment
  • The ability to reduce associated marketing costs by up to 30%

Click here to find out more about how we can help your organisation to do the same.