Customer Retention. COMEX, Implement 29 th April Bjørn Büchmann-Slorup Head of Sales Development & Analytics Danske Bank

Transcription

1 Customer Retention COMEX, Implement 29 th April 2016 Bjørn Büchmann-Slorup Head of Sales Development & Analytics Danske Bank 1

2 Setting the scene Sales Development & Analytics Reporting lines Personal Banking Business Development Currently 9 FTE Strategy & Insights Sales Development & Analytics Strategy Customer Insights Responsibility and mandate Driving the strategic agenda for Danske Bank within proactivity Driving customer centricity initiatives for personal customers Strategically responsible for creating customer value through advanced analytics and big data Predictive modelling Responsible for developing and deployment of propensity models for cross sale, up sale, churn and potential in all MA s Advanced analytics Responsible for Big Data exploration Responsible for Advanced Analytics roadmap for Personal Banking i.e. Sales and Macro modelling, Micro segmentation Source: Danske Bank Personal Banking, Business Development, Sales Development 2

3 Agenda 1 Churn prevention as part of Danske Banks 1:1 marketing setup 2 Impact and learning points from churn prevention initiatives Source: Danske Bank Personal Banking, Business Development, Sales Development 3

4 Why do customers churn Churn is a results of a series of bad experiences which over time hauls the customer towards a tipping point The funnel to churn Pre-churn Opening the funnel Root causes Building frustration Tipping point Predisposing churn Final trigger Decision to defect Churn Customer experience Poor relationship Distanced Bad experience Better offer from competitor Reason Lack of availability Multiple attempts to resolve issues Slow follow-up Long response time and ignoring complaints Branch and teller location Longer distance between branches and tellers Arrogant attitude - Bad image and reputation Poor advise Not meeting customer expectations Bad customer service Disappointing customer Too expensive Better offer from competitor Loan conditions Better conditions at competitor Post churn 4

5 Impact Customer outflow is costly, but the long-run effects on image, loyalty and satisfaction are severe The true impact of customer outflow A dissatisfied customer will tell about a bad experience more than three times per quarter* More than one-third of customers buy a new product at a bank other than their primary bank** It is 5 times more costly to acquire new customers, than to retain current ones*** *Source: BcG Danske Bank Brand Advocacy Findings from BCG's Brand Advocacy Index (BAI) in Nordics ** **Source: Bain Customer Loyalty in Retail Banking: Global Edition 2014 ***Source: The Profitable Art of Service Recovery,Harvard Business Review 5

6 Profitability Starting point Focusing on the customer journey By defining customer engagement based on the life cycle Customer lifecycle Nurturing Retained Performance Acquisition Build up Decline Customer retention Churn... we can extend the lifecycle through structured retention initiatives 6

7 How it works We have implemented a churn prevention set-up to ensure dedicated focus on retention and customer satisfaction Set-up is build on identification of potential Churners and executed via specialized outbound units Step 1 Identification of potential churners Predictive modelling: Based on historic churn behaviour a statistical model assigns each customer with a churn probability. Trigger events Identifying customer actions/trigger that drive churn (i.e. bad meeting experience) Step 2 Execution via Outbound team Outbound team Lead handling through one centralized unit executing immediately on churn indicators Experienced Department of customer satisfaction Gaining experience in handling dissatisfied customers Sharing experiences and sparring with each other The Customer experience Proactive courtesy call Focused on an open and objective Conversation Listening to the customers needs Ensuring customer needs are covered, issues are resolved and customer is retained 7

8 Identification Advanced analytics and predictive models is used to convert customer data and behaviour into actionable retention initiatives Methodology Predictive Modelling Analyzing historic behavior of churning customers and applying predictive modelling to predict future churn behavior Predictive model assigns all customers with a high probability of churning Enables prioritization of retention activities Data mining identifying events associated with customer churn Trigger Events Concrete churn triggers to act upon Relevant for the customer and easy to communicate to advisers (ie. contacting customers with poor meeting experience) 8

9 Churn integrated into the 1:1 setup Churn prevention is integrated into our 1:1 marketing setup which is also driven by customer data and advanced analytics... The Concept: Utilising customer data to provide relevant and sharper offers and communication to our customers Next Best Offers Churn prevention Service Offers Source: Danske Bank Personal Banking, Business Development, Sales Development 9

10 ...allowing us to be proactive in all channels and ensuring a 360 degrees view on the customer Current 1:1 customer communication channels Branch leads Impact Increase Sales Contact centre Danske Guide Increase CSAT Increase Efficiency Decrease churn Other (SMS, mail, ) Ebank banner 10

11 Agenda 1 Churn prevention as part of Danske Banks 1:1 marketing setup 2 Impact and learning points from churn prevention initiatives Source: Danske Bank Personal Banking, Business Development, Sales Development 11

12 Customer experiences Real customer cases show that proactive churn prevention has a positive effect when we contact potential churners No adviser contact Only comfortable with branch transactions Situation: Only comfortable with branch transactions, withdraws all salary on payday local branch has recently become cash free. Action: Explains possibilities and benefits with self-service solutions and arranges for meeting with the branch around the use of credit cards Situation : Hard to get hold of advisor and too long waiting time on finance confirmation. Bad experiences has lead customer to use the bank less. Action: Branch manager contacts customer on the same day. Satisfied customer Situation: Customer was surprised by the proactive contact and was expecting a sales pitch. Feedback: The customer appreciated the proactive contact, to be taken seriously and listened to. 12

13 Impact Churn prevention works: More than customers have been contacted driving down churn with almost 70% From zero to proactive customer contacts in just 3 months Activity Before launch After Launch Churn rates are significantly dropping -69% Impact Control Target Source: Danske Bank Personal Banking, Business Development, Sales Development 13

14 Learning points Advanced analytics is not enough top management and frontline buy-in is key to success Campaign- and modeling Setup in place Strong campaign tool setup Sophisticated statistical models being applied Sufficient capabilities in place Little degree of management buy-in Little or no understanding for the potential impact of the new setup within top management Key stakeholders does not understand the concept No burning platform from a management perspective Frontline not actively using customer messages Customer messages are only used, as a secondary tool for customer contacts Must-do leads are not always Must There is not leads on all customers There is no efficient lead overview in place for the advisors Source: Danske Bank Personal Banking, Business Development, Sales Development 14

15 The buy-in from management was earned by focusing on the customer journeys and repeating the story-telling... 15

16 And when you have the buy-in from management and the frontline... 16

17 Any questions? 17