The Power of Predictive Customer Analytics: How Machine Learning and AI Can Be Used to Power A Proactive Retention Strategy
It is not easy to be in business these days. Macroeconomics such as inflation, rising costs of goods, fluctuating costs of shipping, supply chain woes combined with changing consumer behaviors and spending, compounded by a shift from growth-at-all-costs to prioritizing profitability - it's enough to give even the most seasoned leader whiplash.
Using data to drive decisioning is longstanding best practice, but historically it is not as straightforward as that. Often data is isolated and difficult to access cross-functionally. Or worse, it is antiquated and stale. Teams lack resources and tools to interpret data and thus action it erroneously or fail to take action at all.
There is a strong desire to adopt strategies that are proactive. With so many things outside of your control, it makes the things in control that much more important. Spresso’s Customer LTV & Churn Prediction Module puts customer retention as one of those things in your control.
About LTV & Churn Prediction Module
Specifically designed for business leaders and operators, Spresso’s LTV & Churn Prediction Module uses machine learning and advanced analytics to predict the lifetime value of a customer and their likelihood of churning, in the form of a score. As you can imagine, knowing this information is incredibly valuable as it empowers you to optimize customer engagement and retention strategies, improve the overall customer experience, and ultimately, increase revenue and profitability.
Another key benefit is the ability to improve the efficiency of marketing spend. Through the use of AI and machine learning to analyze customer behavior, marketing teams can identify the most valuable segments of their customer base and allocate their resources accordingly. This reduces dependency on costly customer acquisition tactics and improves return on ad spend with win-back campaigns.
In addition, insights into customer behavior and preferences can be used to personalize and optimize win-back strategies based on individual customer predictions, not a blanket approach, further driving brand affinity and loyalty.
Strategies For Actioning LTV & Churn Score
So, how can businesses combat customer churn and improve profitability? Here are five strategies that can make a significant impact, quickly, and without boiling the ocean:
- Personalizing the timing of win-back communications | send that compelling email, or pick up the phone, when a high-value customer is at risk of churning, instead of following some arbitrary timing. Not only is your customer success team more successful, they’re more likely to experience wins, building momentum and morale
- Personalize the customer communication channels | not only can you personalize timing but you can personalize the channel to reach the customer with that all-too-important win-back message. Because the solution uses your first-party data channel, personalization recommendations are tailored to your business.
- Identify channel trends and opportunities at scale | Comparing churn score across channels allows you to identify macro trends in your data. Not only does this allow you to identify opportunities for retention programs at the channel level, it enables the team to be proactive instead of reactive.
- Offering top promotions and rewards at strategically | Use churn score to inform promotional strategy. Reserving top promotions for high-value customers at risk of churn, instead of blanketing unprofitable customers with the most compelling offers.
- Recoup costly acquisition marketing spend | Improving customer retention means you do not have to spend on acquisition at the same rate to maintain growth. Rather, you can recoup those dollars and apply them to a different part of the funnel, or stash the cash all together.
Ultimately, you know your business best, meaning you know what retention strategies make sense for your goals. Spresso is merely the key to unlocking the profit in your data! Schedule a demo now to see how our solution can help your bottom line thrive.