The Situation
As overall market growth slowed from an annual increase of 50% to just 5%, MobileCo realized that its 35% customer-retention rate needed immediate attention. But it lacked a clear view of the reasons it lost customers, and what steps occurred along the customer-churn journey. And because each department within the company developed its own programs to retain customers, there was no unified view of its customers' issues, and no standardized way to design and implement effective customer-retention programs. The company's fragmented data management system prevented it from identifying and tracking customers or obtaining user feedback. The company also believed that relatively low brand awareness compared with its peers hurt its ability to win new customers in an increasingly competitive environment.
Our Approach
- Diagnose: Working with Bain, the company determined the main causes of customer churn―which included product quality and lack of brand promotion or word of mouth―then identified user groups that could improve the overall retention rate, including high-influence users (opinion leaders), groups with a high tendency to churn (among target users), and groups with high loyalty among target users (community/club organizers, senior members of local fan clubs, etc.).
- Engage: Bain helped the company define and assess six steps and 14 specific customer episodes along the user journey, from initial product consideration through purchase, after-purchase services, and referral to other potential customers. That enabled MobileCo to design initiatives that would improve the user experience along each step of that journey. The company also began to capture key metrics on user satisfaction and identify the root causes of any gaps in the user experience.
- Restructure: The company created a new organizational structure to address four broad categories of customer engagement (user insights, user-engagement planning, user-engagement implementation, and results evaluation), which were then broken down into 20 specific responsibilities. Some of those were assigned to a central group at headquarters, including critical IT capabilities, while others were pushed out to user-engagement specialists at regional offices.
The Results
- Working with Bain, MobileCo is poised to increase its customer-retention rate to 60% by 2022, almost double its current rate of 35%, and on par with its strongest competitors.
- The new organizational structure helped the company overcome a fragmented, nonstandardized approach to engagement, and put in place the IT systems needed to support a unified view of the customer journey and to capture and report critical KPIs. MobileCo can now leverage its new IT capabilities to, among other things, develop a user-churn prediction model.
- MobileCo identified 18 categories of improvement initiatives, spanning marketing, service, user engagement and other areas. As a result, it launched programs to address many customer pain points, including remote diagnosis and repair, an improved user app, enhanced user ID and registration, new product/trade promotions, the rollout of new cloud services, and many other improvements designed to improve virtually all aspects of the user experience.
- The company also developed a sophisticated dashboard that provides executives with a clear look at user-churn data, customer satisfaction levels, dozens of operational indicators, verbatim comments from users, incentive plan performance and many other metrics, with most measures viewable by region, province and city.
