Improving Customer Retention

Project Info

Industry:

Education

Project Overview:

Emphasis on customer retention
Market research on improving product quality
Behavior-based segmentation of current customers to better meet their needs

Considerations:

Fewer customers due to increased competition and high turnover
Perception issues with product quality
Need for moving away from acquisition-only “filling the pipeline” strategies

Improving customer retention through market analysis and product quality improvement

The Need

Client is a large organization in the education industry which mostly focused on an acquisition strategy due to high customer turnover. Unfortunately, the last few years have been difficult for the Client and its industry. Not only has overall demand for its products decreased but there were almost twice as many new competitors that had entered the marketplace. At the same time, they had to deal with ever-rising advertising and acquisition costs. They needed to find a solution that would enable them to maintain operating margins even as new revenue sources were drying up and being diluted across a larger number of competitors.

Our Approach

After consulting with the Client on their goals, their strengths and their differentiators, we worked with them on a number of key retention strategies, rather than just focusing of different acquisition strategies. Customer feedback gave insights into why their turnover was so high (negative perception of product quality) which allowed us to address the quality issue with the Client. They agreed to reinvest some of their marketing spend towards quality control. They also redeployed internal employees to create a strategic team devoted to better understanding current customers based on their behaviors and buying patterns. From there, we were able to help them build a set of customer segments that targeted the right type of activities to the right customers at the right time.