Data provides a foundation for better decision making
Collecting data helped Liam Dickerson better understand the reasons for customer churn
Technology has enabled business leaders to collect data from multiple sources and collate it into usable information.
Once empowered with this information, leaders can make decisions based on evidence – not guesswork.
Using data to learn about customer churn
During the lockdown enforced by the coronavirus pandemic, home cleaning service Housekeep suffered an 80 per cent drop in active users. To make matters worse, the business had no idea why customers were churning.
As Housekeep enabled its users to cancel the service online, the business couldn’t pinpoint the exact reason customers were leaving and didn’t have the opportunity to convince them to stay.
“Obviously we understood it was related to coronavirus, but there’s a broad range of underlying reasons for that churn. We needed to learn more about why customers were cancelling,” head of digital marketing Liam Dickerson explained.
The first thing Liam did was to remove the ability to cancel accounts online. Instead, customers had to get in touch by email or phone. This gave Housekeep the opportunity to talk to every customer who wanted to cancel.
“We captured all the data in a Google Sheets spreadsheet. It started out fairly simply: the customer ID and the reason they want to cancel. If we couldn’t save them, we’d make a note of how we would re-pitch to the customer in the future,” he said.
“We realised that these customers didn’t have a single reason why they were churning. So we added fields for the primary reason – the straw that broke the camel’s back – and secondary reason. The spreadsheet evolved as we found out more about why these customers were looking to close their accounts.”
Making significant changes
The business soon learned that the majority of customers were cancelling because they had more time on their hands and could do the cleaning themselves – not due to medical reasons as the team had predicted.
Liam discovered that most customers didn’t want to permanently close their accounts and had every intention of resuming things in future. Many customers also wanted to continue supporting the cleaners, even if they weren’t currently using the service.
“As a result of the conversations, we built the ability for people to be able to pause their accounts online, instead of cancelling. For any cleanings that were skipped, customers had the option to pay for them if they wanted. Around ten per cent of customers utilised that, which was fairly significant for the business and the cleaners,” Liam said.
“Those calls uncovered some good insights that we wouldn’t have unearthed otherwise and gave us an understanding of the reasons for churn. The fact customers could retain their regular slot and just put their account on pause helped to stem the tide of losses for sure.”
“Those calls uncovered some good insights that we wouldn’t have unearthed otherwise.”
Liam Dickerson, head of digital marketing, Housekeep
Switching technology to capture real-time insights
Flavour supplier Blends Flavours & Colours was struggling to capture real-time data on production due to unintegrated software systems and an overreliance on manual entry spreadsheets.
In order to grow the business, operations director Michael Rowark realised he needed to improve software capabilities.
“One of our main requirements was the ability to capture real-time data. We were always one step behind the actual production on the factory floor,” Michael said.
“As a result, we grew to distrust the data provided by the software which ultimately resulted in staff bypassing the software for manual methods.”
Michael approached the existing software supplier, but the company wasn’t in a position to invest in the capabilities Blends required.
After deciding the business would need to switch suppliers, Michael reached out to his network for recommendations. He then approached several software suppliers to discuss what services were available.
Blends opted for an enterprise resource planning system that would replace its separate systems and keep production and supply chain reporting all in one place. Most importantly, it meant the leadership team could monitor analytics in real-time.
Michael said the new software reduces costs and drives efficiency by saving time across the business. The system has been well-received by staff, too.
“We’d been acutely aware of the limitations within our previous software, which we had used since 2006. The new software allows us to grow, improve profit margins and excel in areas that we’ve been inconsistent in,” he said.
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website: https://housekeep.com
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location: London
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business type: Professional services, finance & banking
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business size: 100-249
Top takeaways
While too much data can muddy the water, essential data such as why customers are cancelling their accounts should always be captured.
Once your business has a solid data set, it is possible to plan your strategy based on evidence not guesswork.
Integrated software systems can compile data from multiple sources in real-time to help you make informed decisions.