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Customer attrition, or churn, affects companies in every industry. Financial Services, Insurance, Telecommunications, Cable and Multiple-System Operators (MSOs) report churn as a primary business metric due to its impact on their businesses. When looking at monthly customer acquisition results, these companies report net adds, which is gross adds minus churned customers.
Churn is often viewed as a virus – management assumes the cause can’t be eliminated and focuses on treating just the symptoms. As a result, companies focus significant efforts on save queues and win-back programs that aim to solve the churn problem. In reality, these investments address the symptoms, not the problems.
Customer churn can take many forms, and happens throughout the customer lifecycle. Research shows that there are key points in the lifecycle where churn risk is highest. I will focus this discussion around the onboarding process and the first 90 days of a new customer relationship. Although the company has just spent a significant amount in the cost of acquiring a new customer, the company hasn’t yet generated significant revenue, and hasn’t yet earned the trust of the customer to cement a long-term relationship.
There are many drivers of a poor experience during the first 90 days, and any of these can increase churn risk and create detractors (using Net Promoter Score parlance). Factors include first bill shock, incorrect expectations being set, undelivered promises, service delivery failures and many more.
Smart and personalized video focuses on helping companies proactively address the drivers of churn risk in the context of onboarding new customers and building customer loyalty. The solutions are designed to use a customer’s data to deliver a personalized video that proactively educate the customer about their specific product or service, proactively explain the first bill to avoid sticker shock, highlight value-added services to help customers get the most out of their new product or service and recommend actions that deliver a great experience.
The above video is an example SmartVideo focused on onboarding a new customer to her insurance policy and plan. Based on her profile and account data, the personalized video includes her insurance agent’s contact information, her policy coverage, her down payment and monthly payment, and recommended services such as a mobile app and online payment options.
At SundaySky, we believe it is lower cost proposition to spend mere pennies to engage the customer via a compelling personalized video at the early stage of a new relationship in order to avoid losing hundreds or thousands of dollars of lifetime value and to avoid the cost of trying to save a customer that is about to leave. By delivering a personalized video experience, companies can reduce churn rate during the first 90 days and achieve a measurable increase in the number of customers retained.