Identifying who can be saved and who will be driven away by retention activity

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Abstract

It has been repeatedly demonstrated that the very act of trying to ‘save’ some customers provokes them to leave. This is not hard to understand, for a key targeting criterion is usually estimated churn probability, which is highly correlated with customer dissatisfaction. Often, the main thing preventing a dissatisfied customer from leaving is lethargy. Interventions designed with the express purpose of reducing customer loss can provide an opportunity for such dissatisfaction to crystallise, provoking or bringing forward customer departures that might otherwise have been avoided, or at least delayed. This is especially true when intrusive contact mechanisms, such as outbound calling, are employed. Retention programmes can be made more effective and more profitable by switching the emphasis from customers with a high probability of leaving to those likely to respond positively to retention activity. This paper discusses how targeting on the basis of such ‘savability’ can be achieved, illustrating the effectiveness of the approach with case studies. Insofar as a paper can be summarised in a motto, this paper’s motto is “savability is the key to retention”.