Without the right customer data and predictive capabilities, creating an effective retention plan is more like a guessing game than a true strategy. Certain kinds of customers are clearly worth fighting for, while others do not justify the expense required to keep them around. To craft an effective retention plan, you need the right tools for identifying your most valuable segments, and a way to predict future spend potential.
Using predictive customer analytics, you can see not only how a customer group has behaved up until now, but also get a window into their future activity—which is essential in building a smart retention strategy.
There are three types of strategies you can use alongside each other to zero in on the most effective retention plan:
- Value-Based Retention: Separate your customer base into high, medium, and lower value customers, all of which will require different marketing approaches and budgets. Here you can also identify customers on the verge of churning and execute winback strategies for those who merit the expense.
- Behavior-Based Retention: Once you have a sense of the value distribution of your customer base, you can further divide those groups into more specific micro-segments. You can use attributes such as purchase frequency, activity, demographics, and potential customer lifetime value
- Advanced Retention Strategies: How about identifying high-value individuals hidden within your median-value clusters whose actions don’t fit their projected personas? These “underachievers” share demographic and behavioral traits with those in your high-value segment, and may simply need a nudge to turn them from middle-of-the-road shoppers to loyal, high-value customers.
Want more details about using predictive customer analytics to build an effective retention plan? Download our marketing brief: Three Ways to Enhance Your Customer Retention Efforts.