Calibre blog
Calibre’s ideas on getting to customer insights that matter for marketers.
 

Case Studies

Regional health insurance company takes aim at customer defection

Situation

The company’s senior management team was concerned about losing customers. They had made significant strides to reverse customer loss and reached a plateau. While their analyses showed some differences in members who were staying and leaving, it was not yielding enough insight to guide effective action. They wanted to get more control over customer defection, particularly with the heightened competition and other changes expected from the rollout of ObamaCare.

Process

After cleaning up their internal data, we started with a univariate analysis using demographic, behavioral and medical claims data from inside and outside the company. By starting with a univraiate analysis, we built understanding and trust before progressing to multivariate predictive modeling. We identified clear differences in behavior between those members who left and those who stayed. This showed executives that there were meaningful differences that could be leveraged in marketing and customer service actions. Next, we developed analytic models that predicted who was likely to leave and when. Market research was done to explain why members might leave. Work is currently being done to understand how the satisfaction of service providers and members influences defection and to test cost-effective ways to retain members.

Result

The client is able to identify the 10% of members who account for almost a third of the defection. Marketing resources are being redeployed to provide different communications and marketing investment to different groups based on more valuable insight about who they are and what they are likely to do.

National specialty retailer finds the growth gems in its customer crown

Situation

The company was spending a large portion of its marketing budget on digital marketing tactics like search engine optimization and emails because it was relatively productive and inexpensive. They were using advanced tracking tools. Over time, however, their results declined along with sales, but they didn’t know why.

Process

We analyzed the customer base and found a disproportionately large marketing investment that was based on traditional marketing valuation parameters. Purchase data was appended that sized customer and prospect groups based on brand and category dollars. Expenditures to those who were low value in both were reduced. Media was optimized by channel and responsiveness to channel, offers and timing.

Result

The new marketing approach cost more to execute, but customer value vs. the prior campaign was up 486% by the first transaction. These new high value customers made repeat purchases within 3 weeks of initial purchase creating radically higher customer value compared to prior standards.

National restaurant chain in position for high growth CRM redirection

Situation

A national restaurant chain and its advertising agency wanted to understand the impact its customer relationship management program (CRM) was having on customer growth.

Process

An analysis was done to understand the relationship between customer value and customer behavior in different channels. It looked at all customers and identified meaningful distinctions between higher and lower value customers, and the trade-off in marketing spending and profitability.

Result

The work showed that the Company was actually wasting much of its loyalty and social media budget by focusing on the least valuable customers. For these customers, they actually lost money on each visit.  Simply because they were more promotion sensitive, there was more of this type of customer and their ad agency didn’t understand this relationship until proof was provided.

Financial services company fires up high value leads

Situation

A financial services company had a dramatic decline in sales leads. Another firm had built an expensive analytic model that was supposed to predict who was more likely to be attracted to the product, but it was not delivering what was expected.

Process

We identified which leads represented high, medium and low value to the company based on look-alike customer data, and for each group their buying habits, media preferences, and points of diminishing return in marketing investment. Analytic models were created that identified with very high accuracy who was likely to do a transaction, when, how often, what offers bring the best return, and the most cost-efficient and effective media plan to generate leads and conversion.

Result

By aligning media buys more closely with customer value, the company was able to spend more to generate a lead, but the return was five times greater than before. Marketing expenditures were reallocated from lower value customers, who represented 68% of the customer universe, to acquisition and retention of higher value customers. Profitability increased by over 7% for higher value customers.

Global technology company grows its crown jewel customers

Situation

A Fortune 50 technology company had established a corporate growth strategy that required large increases in business in a relatively short time period. To achieve the growth targets, the company would need to do a disproportionately large amount of business with high potential strategic customers, a group that represented a very significant share of its revenues. The company’s business units had traditionally gone to market in a very independent manner - - “warring tribes”. While the President had established a global strategic customer management unit to improve service and return from complex, strategic customers, the initiative was experiencing strong resistance from the operating units. In addition, the company did not have a comprehensive view of its customer’s business priorities. The markets in which the company competes change quickly, which compounded the challenge.

Process

The company’s information systems were not set up to provide a company-wide view of customers. Careful work was done with stakeholders at the corporate and business unit level to identify and categorize high potential customers. At the conclusion of this part of the work, corporate leadership and the board of directors had a factual and comprehensive view of their customer base for the first time.


Recognizing the sensitivity on the part of the business units to moving quickly with “crown jewel” customers, we established an “incubator” in the corporate customer management group. The incubation process provided a supportive environment within which the company explored effective ways to serve the account and determine the most productive organizational approach.


Company-wide teams were formed to plan for business growth at 20 target customers. Participants were carefully screened and oriented to make the best use of their time and provide the highest likelihood of success. A significant part of the work was done in collaboration with the company’s customers.

A customer strategy approach was designed to provide a more insightful view of the target customers and resource allocation options. A deliberate distinction was made between three related components of customer strategy: understanding the customer’s situation, developing the company’s response to it, and, obtaining commitment to execute the responses. Through careful application, this approach helped to identify areas of business growth and build cross-unit and cross-function commitment to execution.
 Recognizing the different challenges in customer relationship management versus opportunity management, the teams were carefully guided as they improved their competency in translating planning insights into opportunities, solutions and increased business.

Result

The initial group of high potential customers committed to a 50% sales increase. There was a stronger platform for innovation, collaborative product development with customers and a stronger capability to manage development opportunities across divisions within the company from exploration through launch.

Division of global pharmaceutical company uses ‘strategy-back’ approach to break analysis logjam

Situation

A division president at a leading pharmaceutical company was losing patent protection on his two largest products. The division was faced with the prospect of increasing competition from generic product marketers. The company had debated how to address this issue for 18 months. It had plenty of data, but could not reach a decision. In addition, it had merged with another leading company which added at-risk products and posed other decision-making challenges.

Process

To break the logjam in decision-making, Calibre used a novel approach to strategy development. Instead of taking the traditional bottom-up approach to strategy development, Calibre and the Company established several realistic outcomes and worked backwards to explore and evaluate them. We identified what you would have to reasonably believe along several dimensions such as competitive response, company preparedness, branding, manufacturing, regulatory, sales and distribution, etc., to see to what degree each outcome made sense in the business environment confronting the Company.
 Calibre led discussions with the company-wide team to evaluate the outcomes and rationales and did supporting analyses to supplement available knowledge. Following the strategic decision, Calibre worked with the Company to develop an implementation plan and execute the plan. 


Result

Within about a month, this resulted in a well-understood and well-supported decision on a critically important issue that had resisted resolution for 18 months. Part of the solution involved a rebalancing of the effort made by the company’s direct sales force and its distributors, while a major expansion of the direct sales force was underway. Without the strong support gained through the process described above, it is much less likely that the best solution could have been agreed to and implemented. The flagship brands were able to protect their business against low-priced generic competitors to a greater extent than forecast.