You don’t have to have a loyalty card program to find ways to empower your customers and make their lives easier. Electronic stores, furniture retailers, auto dealers, and, of course, online retailers have enough customer information to track customers’ purchases and interactions with the firm. By gaining contact information early in the sales process they are able to create a continuing dialog. Then there is the television industry. Most network executives wish they could accurately track viewer interactions. Some broadcasters are finding new ways to do so.
For example, British Sky Broadcasting (BSkyB), the U.K. satellite broadcaster, has learned how to use its viewer information to empower customers and reduce churn (customers canceling the satellite service). BSkyB, based in West London, has 5.5 million customers. The company launched its digital service in October 1998 and gradually migrated the entire customer base to digital, discontinuing analog service in 2001. In the quest to reduce churn they previously focused on customers who cancelled the service, trying to get them to change their minds. The company realized that effort and resources were being wasted on the least loyal customers and changed their focus to predicting which customers might churn, enabling action before a customer cancelled.
Even without a loyalty program, Ian Shepherd, customer marketing director at BSkyB, could see opportunities to react to what his customers were telling him. Using algorithms applied to a broad selection of data on preferences and attitudes, BSkyB embarked on what Shepherd calls a “personalization theme.” He says, “If you know customers well and they know that you know them well, they are less likely to cancel. They feel good.” When BSkyB saw that a customer was buying five pay-per-view movies in a month instead of subscribing to the movie channel, the firm took action to move that customer to a movie channel subscription. The subscription offers a better value to the customer and tends to develop longer-term customer relationships.
Based on this monitoring of customer activity, rules are now in place to personalize messages and prevent overcommunication. BSkyB combines careful research on preferences and attitudes with customer interactions to learn what is important to each individual. The company is careful to respect the customer’s time and attention, making sure they receive no more than one mailing a month, and that no two consecutive mailings contain sales messages.
By learning what is important to each client. BSkyB is succeeding in empowering customers. As a result, BSkyB’s churn rates are the lowest of any broadcaster in the world, while growth in average revenue per subscriber reflects that more of their customers are choosing profitable premium channels.
James Lawson, “Don’t Touch That Dial,” Direct, March 1, 2002, pp. 30–31.