We developed strategies for customer retention with staff trained in key messages targeting a goal for keeping between 50% to 60% of customers who call to cancel a card. Retention management is a top priority as it directly ties to the issuer’s profitability and customer value. We further explore which customer characteristics predict the risk of churning and indicate sensitivity to the retention campaign. Analyzing the value proposition is essential for understanding how customers are retained, what will satisfy them, and how they can become more profitable and guarantee long-term satisfaction and loyalty by increasing relevance in communications and offers. The loyalty program with the convenience, speed, simplicity, and security, when put together, will define the ultimate consumer experience. A successful retention strategy will take a holistic view of the cardholder relationship and identify key actions that will improve the relationship in brand advocacy, loyalty, and profits. A retention strategy will have limited success if it is positioned solely as a marketing tactic; successful retention strategies typically involve developing an organizational vision. This vision needs to encompass an agreed set of goals to dealing with the threat from debit and the online space. The strategies also require actions at all levels, including acquisition, customer service, collections, credit, operations, activation, and attrition. One of the first steps in this strategy development is to understand existing customers. Do these customers feel loyal to the credit card brand? – Will they recommend the credit card to others? –What are the factors behind reduced use and cancellation?
Segmentation and profitability measures allow the organization to apply value to each customer relationship. A successful retention strategy will provide credit card issuers with one of the most powerful strategies to fend off increased competition and react to the shorter product life cycles. The successful rollout will also focus the organization’s efforts on customer loyalty, satisfaction, and profitability.
AMONG THE EXPECTED RESULTS OF THE IMPLEMENTATION OF A PROACTIVE RETENTION PROGRAM, YOU CAN IDENTIFY:
• Strengthening proactive retention strategies to have a cancellation rate between 12% to 15% per year.
• Identify early cancellation signals as a customer who was billed every month and stops using the card. It is the first sign of cancellation.
• Variables of conduct before the cancellation of the client: Increase in the amount of payment, reduction in the rate of use, expiration of the grace period for the annual fee, expiration of the introductory rate, transfer of the balance to a competitor
• Development of more efficient information management tools to retain between 50% and 60% of customers who call to cancel the credit card.
• Independence of retention structure for credit cards within bank issuers.
• Retention benefits linked to consumption and permanent loyalty.
• Analyze attrition rates classified by type of card; cause of cancellation; harvest, acquisition channel, use of the card limit, and destination of the Cardholder.
• Other attrition topics include interest rate, months of inactivity, risk score, profitability, number of banking products: silent desertion.
• Evaluate reactive retention rate for additional benefits/discounts offered to the Cardholder.
• Implement a statistical model that predicts the probability of cancellation of Cardholders within a period of time.
• Cancellation tree with reasons of cards with visibility over all cancellation attempts by type of product and change of issuer.