Retention Led Growth
By Ankur Gattani for Insurjo24
Retention-led growth focuses on increasing the customer base by improving the retention rate rather than just acquiring new customers. The cost of retaining old customers is usually less than acquiring new ones.
Understanding Audience Segmentation:
- The audience should be divided into segments based on different characteristics to identify which ones have better conversion rates.
- For example, if say segment 4 has a higher conversion rate than segment 2, strategies should be developed to replicate segment 4’s success across other groups.
Effective Campaigning:
- Clearly define the intent before launching a campaign.
- Divide the audience into a Test group and a Control group to evaluate the campaign’s effectiveness beyond traditional A/B testing.
Test Group (Experimental Group):
- Receives the treatment or experimental condition.
- Used to measure the effect of the treatment.
Control Group:
- Does not receive the treatment (maintains standard conditions).
- Serves as a baseline to compare against the test group.
Importance:
- Enables comparative analysis between different conditions.
- Helps eliminate biases and external influences.
- Determines the statistical significance of the treatment effects.
- Essential for ethical and scientific validation of results.
This helps in understanding the true impact of the campaign strategies.
Case Study: Campaigns for Airtel Company
Airtel, a leading telecommunications company, aimed to increase customer retention and upgrade users to higher recharge tiers without resorting to discounts. The strategy was focused on leveraging data-driven personalization to improve the customer experience and engagement.
Objectives:
- Enhance customer loyalty and reduce churn rate.
- Increase the number of customers upgrading to higher recharge tiers.
- Boost overall customer lifetime value (CLTV).
Strategy Implementation:
Funnel Analysis:
- Airtel conducted a deep dive into their service funnel, from general offerings down to specific city tiers and recharger types.
- This helped in identifying where customers were dropping off and what factors influenced their decisions to recharge or upgrade.
Segmentation and Personalization:
- Based on the funnel analysis, Airtel segmented its customer base into distinct groups based on their usage patterns, preferences, and demographic information.
- Personalized campaigns were then designed to cater to the interests of different segments, such as cricket enthusiasts or movie fans, to increase engagement and perceived value.
Intervention Tactics:
- Airtel implemented targeted interventions aimed at encouraging customers to move to the next recharge tier. Eg from daily recharger to Monthly, Month to quarterly, quarterly to yearly
- These interventions were crafted based on insights gained from the deep funnel analysis and were aimed at addressing specific customer needs and preferences without offering direct discounts.
Post-COVID Strategy:
- Recognizing the change in customer behaviour post-COVID-19, Airtel introduced bundled offering unlimited data plans for international travellers
- DTH+fiber to increased demand for home entertainment and connectivity needs.
Incremental Growth
- Emphasizing the mantra of 1.01 growth or 1% growth daily, stressing the importance of aligning customer insights, MVP/feature experimentation, go-to-market strategies, and gathering feedback.
- It requires a top-down approach where strategy guides tactics to ensure efficient use of limited resources.
- Prioritize coverage and impact
- Crawl → walk → run
Strategic Execution
- Understanding that strategy without tactics is slow, and tactics without strategy are ineffective.
- The execution involves numerous tactical moves within a larger strategy, with channel and market fit personalized to the business and customer demographics.
Effective Segmentation
- The process involves using heuristics, modelling, and AI to drive specific behaviours.
- It’s important to collect data for analysis and segment based on weighted averages, considering the differences between B2B and B2C markets.
Experiment Evaluation
- Highlighting the issue of confirmation bias and the importance of separating the roles of running and evaluating experiments to avoid bias and ego clashes.
- The weight of Net Promoter Score (NPS) in retaining customers and examples of companies like Zomato and Swiggy in their communication strategies.
- The effectiveness of offering incentives, like discounts by credit card companies, to win back customers by reinforcing usage patterns.
Product Management and Growth
Channel Market fit is essential for reaching back with inactive customers
- The customer journey when trying to bring back customers has to be minimal. It has to be personalized for each user
- The Touch base level should be based on the recency and demographics
- The Channel is specific based on business
- When you reach out to customers remember that more than frequency the relevance of the communication is more important.
A great product manager (PM) or growth manager needs to understand the business’s funnel, identify and address leakages, and implement interventions to prevent them.
Focusing on the “happy journey” of customers by adding value at every possible point of leakage. The distinction between PMs caring about adoption and marketers focusing on the funnel is noted.
The necessity of re-evaluating acquisition channels if they result in negative ROI and understanding the repeat frequency of app usage to detect and address deviations. Product-led growth is contingent upon the product’s visibility to the customer.
The content was taken from my notes on the topic “Retention Led Growth” by Ankur Gattani, Chief Growth Officer at WebEngage.
