Customer Value Management

While most business realize the importance of
acquiring customers they often overlook the discipline of customer value management. Acquiring a customer can cost 5-10 times more than keeping a customer and there are significant differences in the value of acquired customers.

Ninah can help clients address key issues in managing customer value such as:

  • Targeting and acquiring high value customers
  • Reducing churn and defection
  • Improving usage and cross sell
  • Building a segmented value proposition
  • Loyalty strategy

Case Study Quality Prospects in Education

Situation

Board pressure to cut marketing budgets at a time of increased competition, and declining enquiry conversion ratios, demanded 'no wastage' and better targeting to ensure that the best prospects would still be reached despite the cuts.

Approach:

Using proprietary software, around 6m student records containing transactional, demographic, psychographic, behavioural and attitudinal data dating back seven years were analysed and mined to determine key performance characteristics. Central to the success of this exercise was the need to ensure that segments developed were of sufficient size, distinctiveness and accessibility to justify bespoke media targeting plans. The project was broke down into three stages:

  • Get a single view of the student database from the various and disparate data sets.
  • Data mining and discovery to determine which characteristics link most closely with 'Motivation to Study'.
  • Develop specific student segments capable of supporting actionable marketing plans and distinct creative messages.

Results

We helped the university to make the shift from a volume-based to a value-based business model, defining the drivers of 'motivation to study' which would increase likelihood of staying the course and sitting exams. Ultimately profitability comes from students sitting exams. Six student segments were established, containing different characteristics and study subject preferences, and varying 'Motivation to Study' scores. 20% of students represented 70% of the value, proving the hypothesis that the volume based approach was not the most cost-effective.