The client is a leading Finnish retailer of sports, fashion, and other clothing accessories who was looking at devising a statistical model to analyze it’s customer lifetime value to determine the profitable customer segments that were driving maximum revenue. Through customer lifetime value analysis, the client wanted to determine the factors that impact customer lifetime and analyze how it impacts the overall revenue figures.
The Business Challenge
At Quantzig, we believe that the growing business complexities have given rise to a new paradigm of customer-centric business models that companies must leverage in order to cost-effectively manage their customers in today’s technologically inclined, hyper-connected world. To support your efforts in doing so our analytics expert have devised a comprehensive suite of customer lifetime value analytics solutions that help focus on different aspects of your business to drive growth and profitability.
Our client, a leading Finnish retail firm, faced several strategic threats that hampered growth including factors such as:
- Market Saturation
- Customer Loyalty
- Customer Service Leadership
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Problem Statement 1 – Market Saturation
The saturation of the retail market in Finland proved to be a major challenge that curtailed their customer acquisition efforts. Owing to this leading players fought over the same customer base with little or no new opportunities to expand the customer base.
Problem Statement 2 – Customer Loyalty
The disloyal customer base was the major cause of the client’s second challenge that led to a dip in profits margins.
Problem Statement 3 – Customer Service Leadership
Having set a mark in the retail sector, the client has a differentiated spot in the marketplace as a leader in customer service. Key competitors and new market entrants, however, has made strides in customer service and were close to nullifying the competitive gap.
The retailer’s moto revolved around delivering differentiated customer service to retain customers and maximize sales. But the irregularities in their customer service levels proved costly due to which they were at risk of losing their competitive position in the industry. They approached Quantzig to leverage its customer lifetime value analysis solutions to gauge customer lifetime value and determine key factors based on which they could improve their customer service differentiation strategy.
Solution Offered and Value Delivered
The retailer collaborated with Quantzig’s to leverage its customer lifetime value analysis solution and develop a strategy to improve its service levels and respond proactively to the strategic threats and opportunities in the market. This customer lifetime value analysis engagement included the entire program lifecycle right from the initial strategy development stage to the final stage that revolved around the implementation of the strategic roadmap.
Our analytics experts worked with the client to analyze their challenges and devise a robust customer lifetime value analysis framework to effectively gauge customer value over a certain period. Based on the insights obtained from the analysis the client was able to develop a customer experience strategy that focused on improving the brand promise, customer lifetime value, service levels, and market position. A detailed customer lifetime value analysis engagement helped the client to achieve ground breaking results by transforming their ability to work with customer data, revolutionizing their approach to understanding customers.
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The combination of smart customer segmentation, powerful multi-step automation, and highly accurate customer lifetime value reports enabled their marketing team to better understand customers, act on the new information, and refine their customer retention strategy. With insightful reporting capabilities and instant, real-time performance information at their fingertips, the retailer now enjoys a new level of strategic marketing agility that helped them increase revenue by 10%.