Say No to Customer Churn: Tapping Data to Identify New Customers and Keep Your Old Ones
As pay TV penetration rates in the United States reach saturation — and consumers have more options than ever before — every customer gained by one provider could be a customer lost by another. It is therefore more critical than ever to access the right data to identify new customers and retain your old ones.
Improved technology for gathering and storing customer data can help you get there. By using these resources as a starting point to understand who your most profitable customers are and what products or services they are loyal to, you can refine your company’s methods for customer retention and cross-sell. This data may also help you target prospective new customers with greater granularity.
Know more, sell more
The adage “knowledge is power” is particularly true in highly competitive industries like pay TV: The more you know about your potential new customers, the better you can target new products and promotions.
Customer data can take many forms, some more obvious than others. Basic demographics such as age, gender and geographic location are good starting points, but current technology allows companies to dig much deeper. You can access data like employment and residential history and credit risk, as well as industry-specific metrics like viewing habits.
The availability of highly specific data on existing and potential new customers allows for more granular targeting of products and promotions. New technologies also make it easier to segment the data, and promotions can be more narrowly targeted — a big advantage in a crowded marketplace.
Start with existing data
Your existing customer base is the best place to begin compiling data. With current data gathering and analytics technology, you can analyze data on existing customers in various ways. Start by identifying your most profitable customers. These are likely those customers who not only buy multiple products, or high-margin products, but also those who stay with you the longest.
Customer longevity is critical to the success of a pay TV provider. As is common in competitive industries, a significant segment of pay TV customers may “churn,” i.e., frequent switch of providers to take advantage of customer acquisition specials. Simply cutting prices may increase churn rates and reduce margins across the industry. Instead, analyze data to better understand your customers’ needs and maintain their loyalty.
Find new customers
The principle behind customer data is simple: The best prospective customers closely resemble your best existing customers. Once you have determined the attributes of your most loyal, profitable customers, use that data to identify new customers with similar attributes. Analyzing what existing customers respond to allows you to more effectively segment and target potential new customers, offering products and promotions that are more likely to result in sales.
Once you have identified prospects, marketed to these prospects and acquired them as new customers, use the same data and the same process to retain them. By replicating the offers that keep your long-term customers with you, you can retain more of these new customers and maintain your market share.
In a competitive industry like pay TV, the importance of utilizing customer data cannot be overemphasized. Those companies that are able to segment customers and tailor marketing campaigns and promotions can win market share from their competitors.
Take the next step
Coupled with these data analytics, statistical modeling can help to determine which customers may be the most profitable based on their projected lifetime value. This powerful duo can help you to drive the promotion and retention strategies which best leverage your resources. Stay tuned as we explore this concept in more detail in our next blog on this topic.
Image source: morgueFile
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