3 Steps to Using Data to Idle Defection Risk

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3 Steps to Using Data to Idle Defection Risk and Improve CX



AbstractIn a digital environment where competition is high, and loyalty is fleeting, your success hinges on being able to provide exceptional experiences that delight your customer at every touchpoint in the customer journey. More than acquisition, more than cross-sell or upsell, your success depends on how well you can manage the leaky bucket. Leveraging data-driven strategies to ensure that you are delivering your most compelling message at the right time, to the right buyer, through the right channel will win loyalty and allow return to growth faster than the competition.

This framework on data driven targeting is part of our Evergreen Growth Engine series that equips sales and marketing leaders through current disruption. For more please see the end of the presentation.


While many company's focus on #2 and #3 of below, 70% of YoY growth can be attributed to retention and should be an

area of focus.

Retention as the Most Crucial Revenue Motion for YoY Growth

2022

2021

X-Sell Existing

Accts

NewAccts

Upsell Existing Buyers

RetentionRenewal

Don’t Overinvest in Acquisition

Invest in X-Sell/Upsell

Conversion Rate

Cost-to-Sell (CAC/ARR)

Acquisition <5% >100%

X-Sell 20-30% 20%

Up-Sell 40% 15%

Retain 75% <10%

STRATEGIC POINTSManage the Leaky Retention Bucket

• Inevitable 10-20% YoY attrition of existing buyers• Must have great delivery and CX• High conversion, low cost• Data-Driven Signals:✓ Who is most likely to attrit? Why?✓ What factors drive retention (e.g. pricing, bundling)?✓ Moments of truth

70%

15%

20%

10%


Proactively retaining customers using measurement, models and operational action

3 Steps to Using Data to Idle Defection Risk

01 Drill-Down on CX Measurement

High-level brand metrics must be augmented with operational customer experience data

02Augment Retention

Models With Emerging Patterns

Retention/defection patterns are driven by both firmographics (industry, size, geo) and product usage experience, which may have sizeable changes - focus on augmenting models with emerging changes occurring during disruption

03 Deliberately Prescribe X-Functional Execution

Marketing, sales, and customer success teams need coordinated approaches


Drill-Down on CX Measurement

1


The #1 Customer Measurement Pitfall!

Single or Limited High-level Metric Focus (Often NPS or Customer Satisfaction) as Panacea KPIs

• Says nothing about what to do better – i.e. what are the friction points that we can sand down?

• Has no link to who/what can drive improvement – i.e. if we find a problem, what function(s) or technologies are the best to address?

• Limited and Lagging indicator – i.e. it is blind to the long-tail insights that drive improvements before failure


Tracking and Acting – Using Data to Your Advantage

BIG DATA

WHAT customers are doing…

ACTIONS

• Customer response data • Transaction history• Online / on-platform behavior

For example:

…and WHY they’re doing it

ATTITUDES

• Usage preferences • New / changing needs

For example:

SMALLDATAINSIGHTS

Evergreen Customer Understanding

Aligning to Your Customers’ Experience


• Your customer’s experience is not even over their lifetime – there are specific “high-leverage” points that are typically amplified in disruptive times.

• Mapping systematic data and insights flows around these ZMOTs enables proactive sales & marketing retention efforts.

• Use a mix of informal (internal hypotheses, etc.) and external (customer research) to identify and confirm these ZMOTs

One bad experience can lose a customer

Start With the Zero Moments of Truth (ZMOT)

The memorability and Importance of a zero moment-of-truth (ZMOT)

Unless you’re very lucky, customers almost never think about you!

Life…

Thin

kin

g ab

ou

t /

enga

gin

g w

ith

yo

ur

bra

nd

…

And if you lose even a few of those battles, you’ve lost the customer!

Sen

tim

ent

of

exp

erie

nce

= Net negative: I’m looking somewhere else


An Effective CX Dashboard / VoC Framework Maps Metrics to Critical Experience Points to Prescribe Tangible Action

Cu

sto

mer

Jo

urn

ey S

tage

s /

ZMO

T

Metric Type

Internal Data Metrics External Customer Metrics External Customer Qual

Overall• Renewal / repurchase

propensity models• NPS• Csat

• Digital sleuthing (message boards, reviews, etc.)

Sales Transition / Onboarding

• User logins / user id• Successful ‘go-live’

• Onboarding ratings• Implementation / early Churn

IDIs

Users and Activation

• Product usage frequency• User logins / user id

• Customer recommendations

Issue Resolution

• Resolution time• Resolution results• Resolution topic

• Resolution ratings • Resolution feedback

… … … …

Representative CX Metrics Matrix Examples:


(Re)Architecting Effective Retention Models

2


Three Critical Inputs for Effective Retention Models to Link Activation Pathways

Retention / Renewal Outcomes

Outcome of Renewal Event?

No Yes

$s Retained YoY

<75% >75%

Retention / Renewal Drivers

Baseline Demographic / Firmographic

Purchase / Usage / Behavioral

Engagement Patterns

Multi-touch Contact Cadence

History

What are my baseline expectations for this customer / account?

What behavioral patterns are showing positive or

negative trends

What can be done to effectively drive desired

outcomes?

• High value / low value• Size• Verticals• Etc.

• # of engaged users• Frequency of users• Issues / resolutions• Attitudes (Csat, etc.)• Etc.

• Messages received• Offers / pricing• Training / onboarding

history• Etc.

Control for the baseline to manage against the areas you can impact


Retention models and scoring algorithms are built off historical data – you need to proactively adjust for market disruptions!

COVID-Disruption Watchout! Past Performance Does Not Guarantee Future Results

• Create an initial set of external (market driven) and product usage (experience driven) hypotheses.

• Changes will ripple through at different times – add and adjust.

Develop Retention Disruption Hypotheses

Test Hypotheses on Current Results

Integrate Into Retention Coding and Scoring

• Test hypotheses on current outcomes and other patterns.

• Less about statistical significance as much as it is about confirming a directional results.

• Remember, retention progress over perfection is the goal!

• For predictive models, where possible, use recent period weighting to amplify the new insights in models.

• For rules-based models, incorporate new flags ‘in addition to’ the scoring.• E.g. red/yellow/green score with a new

field for “industry concern”

• Ensure processes are in place to prescribe proactive actions based on new scoring.

Incorporating Emerging Insights into Retention Models and Scoring


Broad Market Trends

• INDUSTRY DYNAMICS

• Post Disruption "winners" -- technology companies and cloud-based solutions

• Post Disruption "losers" -- retail, hospitality, real estate

• Entrance of new competitors

• MAJOR COMPANY EVENTS

• Management changes

• Mergers, acquisition, cost reduction

Executives can flag new account retention risk early if they track these patterns

The Five Leading Signals of “Retention Disruption”

Customers Specific Trends

• INCREASE/DECREASE IN USERS AND/OR USAGE FREQUENCY

• Can signal greater product need…

• …or can highlight product and pricing issues

• BUYING BEHAVIOR CHANGES

• Increased remote working, online purchasing

• Purchasing through alternative channels

• INCREASES IN SUPPORT INQUIRIES

• Call center support

• Web site access

• App abandon rates

1

2

3

4

5


Activating X-Functional Retention Plays

3


Identifying the key dimensions of engagement provides the framework for understanding different warning signals

Segmenting Your Customers to Allow for Prescriptive Retention Plays is Critical

# of Users

UsageFrequency

Low High

Low

High

High Defection

Risk

NarrowLoyalty

TenuousLoyalty

Broad Loyalty

Retention Play: Increase Usage• Add more content, data• Add features to leverage

network effect

Retention Play: Increase # Users• Streamline activation• Increase training


Lost in Translation

Even the best analytics can fail to be adopted, typically due to communication breakdowns between sales/CX and marketing analytics

Three Areas of Data-Driven Sales/CX Activation Breakdowns

DATA AND ANALYTIC MODELS

CRM AND SALES/CX

OPERATIONS

BUYER PERSONAS AND

JOURNEYS

MESSAGING AND CONTENT

SALES/CXMOTIONS

Actionability Deficit

Motion-Play Disconnect

The information transfer is broken between the analytic

signal and the sales or servicing team

Sales and servicing lack the knowledge of buyer types—

and corresponding enablement content—to

execute effectively

It’s unclear how models should be used in sales and

servicing motions; they have not been integrated

effectively into sales processes and training

The data science is sound

Act

ivat

ion

b

reak

do

wn

s


Bear Hug Play SWAT Play

Loyalty Rewards ✓Bundled Product Offers ✓User and Usage Analytics ✓Industry & Peer Benchmarks ✓ ✓Case Examples(Internal and External)

✓

Early Renewal Price Discounts ✓Complimentary Training ✓

Overcome Retention Risks by Instituting Prescriptive Sales & Marketing Plays

BearHug

SWATTeam

Nurture Natural Attrition

CustomerDefection Risk

Cu

sto

mer

AR

R P

ote

nti

al

Low

Low

High

5.0

High

1.0

5.01.0

Four Sample“Reboot” Sales Plays

Examples of Targeted Retention Tactics

Once you know the patterns, prescribe the strategies that move the needle towards retention


Proactively retaining customers using measurement, models and operational action

3 Steps to Using Data to Idle Defection Risk

01 Drill-Down on CX Measurement

02 Augment Retention Models With Emerging Patterns

03 Deliberately Prescribe X-Functional Execution

I M M E D I AT E N E X T S T E P S

✓ Map your customer’s experience and identify ZMOTs✓ Identify mix of internal/external measures and align directly to each portion of

the journey✓ Utilize reporting in X-functional updates that focus on prescribing action from

insights

✓ (Re)Architect retention models with critical usage data to drive actionability✓ Develop and test COVID-disruption hypotheses✓ Integrate findings into renewal scoring/coding

✓ Segment your customer base into logical retention-based groupings✓ Develop prescriptive ‘plays’ to ensure proactive execution against retention risk


GO-TO-MARKET

SCIENCE

Here are more frameworks to help you do just that:

Mapping Buyer Journeys for Optimal Engagement and Go-to-Market Performance

With over 25 years executing best-in-class buyer engagement programs, we know how to attract and engage new buyers for greater ROI and faster sales cycles.

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Connecting strategy seamlessly to execution.

Overcoming 3 Common Barriers to Create a Data-Driven Sales Culture

We’ve seen three common barriers that impede successful adoption of data-driven insights by your sales channels. Understand these barriers and get 10 go-do’s to realize ROI of your technology investments

DOWNLOAD THE FRAMEWORK >

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https://market-bridge.com/resource/overcoming-3-barriers-to-create-data-driven-sales-culture/

https://www.market-bridge.com/resource/mapping-buyer-journeys-for-optimal-engagement-and-gtm-performance/

https://www.market-bridge.com/resource/mapping-buyer-journeys-for-optimal-engagement-and-gtm-performance/

https://market-bridge.com/resource/overcoming-3-barriers-to-create-data-driven-sales-culture/

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3 Steps to Using Data to Idle Defection Risk

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