Two Australian customer retention experts have developed the world’s first churn predictive software that combines data from across business with the powers of artificial intelligence (AI).
Libby Dale and Mike Crooks (pictured above), co-founders of Melbourne-based customer engagement consultancy The Working Octopus, are the brains behind SmartMeasures.
Their clever software enables businesses to accurately pinpoint if customers are on the verge of churn (or at the very least, are thinking about it) and to very quickly step in before an irritation or series of annoyances become a full-blown problem and the customer leaves.
The new solution is riding on the back of a global trend focused on retaining customers rather than accepting attrition as a normal but painful part of business.
Dale said the software has the potential to save businesses millions of dollars in lost business.
“Conservatively speaking, our software is capable of reducing churn by 10 per cent,” she said.
“By way of example, a company losing $500 million to customer attrition – which is commonplace in high-churn industries – can at the very least anticipate savings in the order of $50 million per annum.
“Naturally our expectation is that it will save them much, much more.”
SmartMeasures is now available to English-speaking businesses globally which have a churn problem costing them in excess of $10 million annually. However, those with churn problems well over $50 million are likely to benefit most.
Rather than relying on the ‘pre-cogs’ of the Minority Report to foresee pending attrition, the software relies on an exhaustive collection of customer risk markers or measures drawn from across business.
These markers measure changes in customer behaviour such as not paying bills on time, declining product usage, complaints, calling the call centre on multiple occasions, as well as the impacts a business has on customers such as operational problems, late delivery, variable product quality and billing errors.
They also measure external environmental events such as moving house.
When one or a mix of these markers is detected by SmartMeasures, alerts are triggered in real time, enabling the software to instantly initiate a series of automated treatments or for business to step in and remediate the problem.
The combination of artificial intelligence with the breadth of data analysed and the use of automated treatment plans is the true ‘magic sauce’.
According to Dale, it has taken the prediction and remediation of customer risk to a whole new level and provided the software with its real edge in the market.
“Basically, it has empowered our software to do what would not be humanly possible,” she said.
“It enables Smart Measures to scroll through vast amounts of customer interaction data and very accurately predict which customers are at risk of churning and determine what action or treatment plans should be applied to the problem.
“The best is that this happens in real time which means that businesses can react instantly to a customer’s changing circumstances, rather than some time after the event when remediation may be too late and the damage is already done.
“Also, rather than take a ‘one size fits all’ approach to managing risk, SmartMeasures gives businesses the smarts to intervene on a case by case basis and apply treatment plans to suit the level and type of risk detected.
“This cuts out the annoyance for customers of being placed in a mass retention campaign that has little or no relevance to them or may cause further irritation.”
The software falls into a rapidly emerging business practise area or discipline known as customer success management.
Unlike customer service, which takes a reactive approach to managing customers and their problems, customer success is about businesses being proactive and dealing with customer problems and issues before they become insurmountable and the customer leaves.
While so called ‘customer success software’ has been about for some time, it has largely been used by software as a service (SaaS) providers to measure the success of how customers use their software.