Leveraging AI to Maximize Customer Retention and Acquisitions
The deregulated retail energy market is a voracious landscape, with new competition flooding the marketplace in droves, trying to acquire as many RCEs they can get their hands on. However, the deregulated market has put the power in the hands of the consumer as they search to find the provider that offers the optimal plan(s) that aligns with their values and their budget. Thus, consumers are now forcing providers to think outside the box about which campaigns and products they need to offer to acquire new customers while retaining their existing customer base.
Step #1 for a REP is to understand the cost of customer churn and find a way to reduce that percentage. It is less expensive to retain an existing customer in almost any industry than it is to acquire a new customer. If you lower your churn rate by 5%, how much additional lifetime value the existing customers would produce and provide sales reps the continued opportunity to upsell new innovative products the company is launching. One primary key to increasing retention is improving the customer experience, which can be done by enhancing your CRM system. As Salesforce has recently documented, “80% of business leaders agree that a single source of customer truth would create “Significant” or “Indispensable” value for their organization, but only 25% believe their CRM system provides a complete picture of a customer, across all departments and inputs.”
Once you have a handle on your existing CRM system, you can now harness the full potential of the existing data already in your possession to launch effective marketing campaigns focusing on both retention and new acquisitions. This can be achieved by properly implementing Artificial Intelligence (AI) technologies on top of your CRM.
I was speaking with the Chief Marketing Officer at a prominent REP recently. He said not so jokingly, “The good news is 50% of my marketing campaigns work. The bad news, I don’t know which 50% is working.”
Many REPs think of marketing as a budget-driven department, not as an opportunity to increase their ROI. With slim margins in the retail energy market, AI-based technologies can take the guesswork out of the equation and promote campaigns with the highest probability of return. Some large telecom companies and cable operators have been leveraging AI to drive retention and acquisitions for quite some time. Now, what if your AI solution was able to compute the best-personalized offer to a customer or prospect? By sending the perfect offer to customers, your company’s revenues would grow by virtue of a higher conversion rate. If you personalize the offer, it is more likely to prevent over-discounting and loss of revenues. And if your AI solution is crunching the numbers to present these personalized offers, your sales and services reps are saving time and would be able to handle 2-3 times as many customers.
In this fast-paced marketplace of passing customers back and forth, you can buck the trend by implementing a self-learning AI solution with your existing data source, so you stop losing your customers and start acquiring more customers from the competition. You know you have the data; your goal now is to try and leverage the insights in that data you already have.
Saurajit Kanungo is President at Cyber Group, an IT Consulting company that helps companies grow in unison with the ever-changing marketplace by guiding its clients to leverage information technology solutions with fast entry-to-market results.
