Gold Winner: Cablecom Combats Churn With Customer Insight
To outsiders, Cablecom GmbH is a powerhouse. But things aren't always as they seem. A closer look at the telecommunications giant a couple years ago would have revealed a precarious house of cards.
"We were often in the press and perceived by the market with a very negative image as a company that was just interested in making money and not really caring about customers," says Federico Cesconi, director of business intelligence at Cablecom, the largest cable network in Switzerland with 73 percent of the Swiss cable TV market.
The problem stemmed from the organization's traditional telecommunications focus on acquisition versus retention. Cesconi says the company targeted competitors' customers-but competitors quickly followed suit. "We had to defend our customer base from attack by competitors andthat has driven us to be more focused on customer satisfaction and loyalty and retention," Cesconi says.
Cablecom was armed with a wealth of information to use in its battle for customers, but the company had no technology or leadership to tap into the data, understand it, and act on the information. Meanwhile, customer satisfaction was slipping and customer churn was increasing.
Recognizing the desperate need to determine the point at which customers became dissatisfied and target them with more tailored offerings, Cesconi recommended in 2005 that the company start investing in technologies and processes to combat churn. The objectives of the plan were to identify customers at risk of churning, optimize the contact strategy, decrease customer acquisition costs, improve customer satisfaction, and provide actionable information to front-line employees.
Phase 1 began that year with pure data mining in which Cablecom began analyzing behavioral data, such as orders, transactions, and payment history. Phase 2, in 2006, introduced a survey program. Using SPSS's market research software, the company introduced online surveys aimed at customers who had been with the company for at least seven months. Customers were scored by the likelihood to churn.
But the process didn't stop there. Phase 3-analyzing and acting on the feedback-launched in 2007. The company now combines the attitudinal with behavioral data and analyzes 30,000 points of feedback per month with SPSS Predictive Analytics to reveal 100 indicators of churn, including the number of service queries and the initial activation period. "Every time customers have an interaction with us, we ask them to share feedback," Cesconi says.
A customer insight group evaluates customer expectations assessed from the data and a customer retention group uses the resulting metrics in its marketing outreach to customers. When feedback is negative, the specific team responsible for the particular issue contacts the customer and the team must ensure the problem is solved and the customer is satisfied.
Cablecom now has a broad view of customer data that includes behavioral, attitudinal, and description data. By combining multiple data sources, Cablecom can now see the company and customer viewpoints.
As a result, customer churn rates have decreased from an average of 19 percent to
2 percent. And 53 percent of the company's dissatisfied customers became company promoters only two months after phase
3 launched last November. "We get more revenue from existing customers," Cesconi says. "So we need to grow share of wallet from customers and we have to do that not just in the short term, but really by building a positive win-win relationship with customers."
Silver Winner: Wolters Kluwer Shares Data to See Opportunities
Not long ago Wolters Kluwer saw business start to decline as a result of internal competition. The U.K.-based healthcare publisher blamed its acquisition strategy, which resulted in siloed data and a lack of transparency. "We were competing against our own products and obviously that's not the best position to be in if you're trying to convince the customer that we have a high-quality service," says Michael Turner, head of management information services.
He recommended a customer management framework to ensure the uniformity of all information. The strategy was introduced in 2005 and governed by a customer management team from key areas of marketing and business systems. But its real impact hit in 2007 when the company began optimizing the system by adding a SAS portal and analytics software from JMP to the existing infrastructure to analyze the data and dynamically link statistics with interactive graphics to better visualize the data. "We're developing, building, and understanding our data," Turner says.
That wasn't always the case. Turner says at first organizing the data was challenging to say the least. "We [asked], 'How many data sources are there?' and they said 'Four or five.' The four or five turned into 70," he says.
Another challenge was resistance from employees. The company overcame opposition through education that included workshops, seminars, and breakfast meetings to demonstrate the value data sharing as a customer strategy would bring to the organization. In addition employees are now rewarded for their performance around specific customer-focused goals.
Sharing data, Turner explains, gets employees to think differently about customers. And it's working. To date, the company has realized an ROI of 2.25 sterling to every 1 sterling spent. "Now we have a more central data view and we no longer walk into situations blind," he says. "The data is much more specific than the more generic view of the world where the data is rubbish."
Bronze Winner:Stratford Shakespeare Festival Builds an Enterprise
With four stages, 800 performances, 1,000 employees, 550,000 customers, and an annual revenue of $53 million, the Stratford Shakespeare Festival in Ontario, Canada, is not your ordinary local Elizabethan production. As such, in recent years the 56-year-old festival could no longer operate with constraints that prevented it from delivering extraordinary customer care.
Lisa Middleton, director of audience development and analytics for the festival, says that prior to 2004 departments operated separately, data lived in silos, and communications were irrelevant.
With numerous limitations, in 2003 Stratford embarked on an 18-month restructuring period to rebuild an enterprise that yields patron involvement and engagement. "We took a huge amount of time and asked, 'How are we going to interact with the customers and what data do we want to collect?'" Middleton says.
During that time the organization deployed Tessitura Performance Arts CRM software, which links all data and provides employees with access to that data. Information on customers is collected through the contact center and in surveys and tracked through the CRM system. A dedicated customer service coordinator responds to a range of customer issues within 48 hours and is empowered to make offers if necessary.
The organization also launched various segmentation models using SAS, with the goal of responding to customers' individual needs. There are predictive models around member giving, behavior, and value.
During 2007 and 2008 the festival introduced a seat-pricing segmentation model to tailor pricing on an individual performance basis, as well as an event-trigger discount strategy, based on a patron's purchase history. Middleton says the plan for 2009 is to start calculating customer lifetime value.
Organizational changes accompanied the new technologies. CRM, marketing, ticket sales, accommodation booking, fundraising, and group sales moved under the audience development department and operate on a single database. This allows for a single contact point for patrons and consistent marketing output.
As a result of these changes, Middleton says, overall membership revenue has increased from $4.6 million in 2004 to $6.2 million in 2007, a spike of 35 percent. "Everything we do here is about the customer," she says. "That's ingrained from day one."