Churn Management Optimization for Card Issuer

The case: Leading card issuer aiming to increase customer retention. 

Our client, a leading financial institution, being fully aware that it is more efficient and cost-effective to win back an existing customer rather than acquire a new one, aimed to redesign its entire customer retention strategy. Linakis.digital was appointed to address this challenge by combining advanced analytics with business sector expertise.    

The methodology: Proactive & Reactive Churn Optimization

To increase retention, we adopted a twofold approach enabling the business to optimize both its proactive & reactive retention strategy.   

Proactive Churn Optimization

The key steps in the process included:

• Analysis of historic patterns related to the attrition for the card products in scope. Our work covered both declared attrition (i.e. customers contacting the bank to cancel their card) and silent attrition rates (i.e. customers showing disengagement signs in their relationship with the bank) over time. 
• Development of predictive models to identify customers with a higher probability to cancel or stop utilizing their cards 
• Calculation of the value that each customer can generate in the near future, based on their profile and overall bank relationship 
• Segmentation of the portfolio based on "Equity at risk" and deep dive on each segment's prevailing characteristics to identify the best fitting offer for their retention.
• This methodology enabled us to acquire critical information and recommend the prevailing Customer Retention Strategy & Offers by Customer Segment at risk.

Reactive Churn Optimization

Having a thorough knowledge of the customer calling to cancel a card product, set the basis for prioritizing the retention effort. The next step was to optimize the reactive retention strategy, and our work started with a detailed Process Mapping and Gap Analysis of the bank's retention process across channels. That way, we recorded all customer contact points and were able to identify areas of improvement.

Implementing the newly designed customer retention strategy through all customer contact points, we were able to fully revamp the end-to-end retention process of the bank's approach covering:

• Channel management, establishing direct communication with customers in every channel.
• Handling Flows & Scripts.
• Retention Tools (i.e. offers) allocation  per customer.
• Performance Management.
• Reporting & Monitoring.

The Result: Increased card retention rates and profit 

Linakis.digital developed both a Proactive and a Reactive Churn Optimization approach, ensuring the card issuer received the maximum benefit. Combining Churn Analytics with business expertise, we were able to:

• Adjust the retention effort based on the customers' value.
• Increase retention rates by making relevant offers to cardholders based on their profile. 
• Boost sales over time by transforming a card cancellation attempt into an opportunity to re-enforce the product's value in the consumer's mind.     

Based on this approach, the bank implemented a robust Customer Retention Strategy that resulted to:

Linakis.digital Churn Analytics: Value-based retention strategy 

Churn Analytics help to proactively identify customers probable to churn and, combined with the relevant business expertise, can ensure that companies will allocate their retention efforts & resources based on the customers' expected value.