How Can Prescriptive Analytics Retain Your Customers?
Businesses face complex problems which can be addressed by taking one of many courses of actions. While predictive analytics helps model the likely future impact of an action, prescriptive analytics aims to show users how different actions will affect business performance and points them toward the optimal choice.
Typically, prescriptive analytics establishes a comprehensive description of the business process, models selected process, and specifies the business outcomes to be analysed.
Prescriptive analytics incorporates a variety of components to optimize business outcomes. Such outcomes are achieved by combining an organization’s historical data, machine learning algorithms, business rules and the business process model. Prescriptive analytics models can be used to inform individual manual decision making, or be embedded into operational systems to support automated real-time decisions.
Examples of business processes where prescriptive analytics are applied includes:
- Sales and marketing
- Customer retentions
- Product development
We will illustrate how prescriptive analytics are utilised in customer churn and retention processes.
All businesses are prone to competition. Be it in the form of competitors poaching clients, or current clients gravitating towards a better deal. Owing to the competitive climate in which we find ourselves in, finding new clients can prove to be challenging. Due to this increased difficulty, organisations are shifting their focus towards retaining existing customers.
In addition, retaining existing customers are generally significantly cheaper than attracting a new customer, thus emphasizing the importance of focusing on client retention within an organization.
Although churn will always exists in a business, it needs to be managed effectively. In order to minimize churn, organizations should utilize prescriptive analytics to :
- proactively identify those customers that are most likely to churn and intervene to prevent this; and
- construct retention campaigns that prioritize the most valuable customers and offer them targeted service offerings.
One of the added benefits of prescriptive analytics is the deeper understanding and insights one gets into the behavior of your customers. For example it,
- helps the business to identify the actions that typically precede a sale or a customer cancelling
- finds the actions that weaken and strengthen customer relationships to ensure a better service can be offered.
Most businesses don’t realize the value that can be derived from the customer data that resides within their organization. These include:
- historical transaction data;
- product and contract information;
- demographic details;
- client interactions/touch point information such as call center records, etc.
All of the above information can be used to train machine learning models to learn how customers behave and importantly predict future customer behavior. The analytics will provide insight on what are the major reasons for churn – either product or service related issues, demographic constraints or if there are better deals offered by competitors.
The intelligence derived about customer behavior assists organizations to deliver tailored customer interactions. These tailored interactions help keep customers loyal and builds brand value due to the positive experience of the customer.
These type of churn and customer retention prescriptive analytics features all form part of the BusinessOptics Sales and Customer analytics solution. Schedule a demo today, to find out how the BusinessOptics Sales and Customer Prescriptive Analytics Solution can assist in retaining your customers.