Deploying a Looker-Based Discount Strategy Dashboard to Increase Customer Retention
The Situation
A leading U.S.-based producer of collagen-based health supplements was struggling with high churn, with almost 60% of the customer base under high churn probability. The flat “30% discount rate” strategy was not increasing the customer retention rate and was decreasing the purchase margins. Merilytics (an Accordion Company) partnered with the Company’s CRM Team to design a Looker-based discount strategy dashboard, which provides discounts on customers’ next purchases to target based on historical purchase characteristics (such as churn probability, lifetime value (LTV), and type of customer). Merilytics (an Accordion Company) also created a Customer 360 profile using customer survey responses and created a Net Promoter Score (NPS) dashboard.
Services
Reporting & Analytics
The Execution
- Calculated churn probability for each customer based on machine learning algorithm, using LTV, recentcy of order, frequency of order, tenure of customer, discount, and subscription order as inputs.
- Segmented customers based on type, churn score, and LTV into 27 segments; Subscriber-High Churn-High LTV being the highest priority segment and Try & Bounce-Low Churn-Low LTV being the lowest priority segment.
- Assigned personalized discount rates between 5-30% that are updated daily for each customer based on their segmentation.
- Consolidated the customer survey responses in a consumable format and stored in the data warehouse. Created a pipeline between the data warehouse and the CRM tool to pass the customer survey responses in the form of ratings over the CRM tool.
- Calculated the NPS for each customer based on the ratings given on Bazaarvoice, Survey Monkey, and site pop-ups and built a dashboard that shows the overall Brand NPS across all survey sources and an overall Product NPS score.
The Results
As a result of the engagement, the Company’s discount strategy improved client margins as opposed to the previous flat 30% discount rate given to all customers. The personalized discount rates helped the CRM Team customize their customer win-back funnel emails and share tailored discount rates based on the customer’s purchasing behavior. The NPS dashboard also enabled the client team to make better strategic decisions, such as streamlining the product line-up, by identifying low-rated products and removing them from listings.