Customer Treatment Solutions for

Preemptive Retention by Credit Card Issuers

Achieve optimal levels of efficiency by leveraging our customer treatment solutions derived
from our extensive industry experience, breakthrough insights and proven approaches

Customer treatments consists of a mix of

Predict and prevent
► Offers (products/services)
► Rewards (discounts, points, other incentives) To
loss of cardholder
► Relationship programs (memberships, groups, etc.)
business before it
► Communications (newsletters, thank you notes, etc.) happens
The key to determining and designing the optimal treatment for a customer for the
purpose of proactive or preemptive retention are:
1. Predict the likelihood of loss of business from a customer
2. Predict the timing of that loss
3. Determine the true economic value of that customer over a planning period

Traditional Approaches

Approach/Activity
Monitor customer communications, e.g., complaints
Utilize customer satisfaction scores
Results/Benefits
Yields some benefits, but, quite limited.
Studies have shown that only 20-25% of customers communicate their
intentions.
Limited benefits.
Sometimes very misleading:
–Many customers who rate their satisfaction level as very high, overall and
across all attributes, switch, whereas customers who give very low ratings
stay with their providers.
–Many companies have dramatically improved their customer satisfaction
ratings while their customer churn continues unabated.

Analyze/model data of customers whose business has Can be quite effective depending on the quality of the data .
been lost, to determine patterns of actions and look Limitations are that this approach is based on “correlation” and not “causality”
for those patterns as a predictor among current which may not be robust over time and over different samples.
customers Commit Identify Prioritize Manage
to Targets Opportunities Opportunities Execution
Analyze/model data of lost customers to ascertain Can be effective in improving overall customer experience, but, cannot be
“root causes” for the loss and take measures to applied at the individual customer level.
address those causes

C-Metrix Approach
SCWM Blueprint
Enhance the traditional
Segment Ascertain true
approaches by Fulfillment
Customer
database(s)
customer base
along inherent
value of each
customer based
loyalty on loyalty
implementing relevant dimension coefficient

Database Infrastructure
elements of SCWM, our Customer Interaction
Inbound
• Phone – Call Center; IVR
Develop cost functions
comprehensive framework • Web/Email
• Direct Sales/Agents Determine
optimal
for each scenario of
pricing and retention
• Kiosks
for optimizing customer • Mail product mix,
channel,
pricing and
programs Determine impact
of product mix,
pricing, care,
Outbound Develop
acquisition, retention and • Phone – Call Center
• Web/Email
retention
programs corresponding revenue
impact models
retention programs
on each customer

• Direct Mail
churn • Broadcast Media
• Direct Sales/Agents
Strategic Customer Worth Management (SCWM)
What is SCWM?
SCWM is a proven enterprise solution based on our unique “true customer worth”
evaluating framework that determines the optimal treatment and rewards to offer to
acquire, retain, or expand business with each customer.

Why is SCWM useful?

SCWM maximizes ROI on each customer, getting maximum “bang for your buck” from
marketing, customer acquisition, retention, and win-back expenditures.
The Seven Common Myths about Customer Loyalty
How is SCWM different from other solutions? and the Realities Behind Them
•SCWM is based on the inherent loyalty orientation of each customer and their current There are many different and often conflicting
and/or potential revenue stream notions about issues related to customer loyalty that
•SCWM is focused on being predictive rather than reactive are being held as business truths.
This thought piece takes a look at some of the
commonly held beliefs in light of both the intuitive
logic regarding the issues and the evidence gathered
Success Story : Leading Credit Card Issuer from experience in a number of industries. The goal is
Background to gain a clear understanding of the why’s and how’s

Client was losing a significant fraction of the “wallet share” of profitable of the evolution of the myths about customer loyalty
and to establish the realities behind them.
cardholders to other issuers due to enticing lower rates and balance transfer
offers.

Matching or even exceeding competitor offers reduced account closures and
wallet share erosions, but, since the size of their accounts became smaller,
number of unprofitable cardholders rose.
Approach

C-Metrix applied SCWM our unique framework based on our breakthrough
insights and analytical models on customer loyalty (switching behavior), to the
client’s cardholder information data

Evaluated cardholders based on their inherent switching propensity, and
revenue potential and determined their “true worth” score for the issuer.
Customer Churn: The Stealth Enemy

Matched programs i.e., type of account, fee structure, and rewards to each Customer churn is a critical business issue in most
customer based on their needs, preferences and “true worth” score. industries, particularly the ones with huge customer
bases. If not managed properly, customer churn will
Results/Benefits ruin a company and may have a severe adverse

Profitable customers increased by 6% and overall profits by 9% (from previous impact on the industry and the economy as a whole.
level) since our programs matched customer needs, preferences and “true This paper takes an incisive look at the fundamental
aspects of customer churn e.g., customer acquisition,
worth” more precisely. retention and loyalty and describes a breakthrough
framework and methodology for optimally managing
Our Full Spectrum Solutions & Services for churn by matching the total treatment of a customer
to their true lifetime worth which is based on their
Credit Card Issuers inherent loyalty propensity.

C-Metrix has worked with a variety of credit card issuers to enhance their
cardholder acquisition, retention, expansion, and churn management
capabilities.
We employ innovative strategies, effective data & analytics and necessary
technology to address priority business issues of the card issuer with proven
results in reducing costs and improving bottom line performance.
►Customer Segmentation & Profiling ►Customer Churn Optimization
►Campaign Strategy & Optimization ►Rewards / Loyalty Programs
►Profitability Analysis
Program Impact and ROI Assessment

Program Design, Execution & Optimization

Lifetime Customer Worth Analysis Hit or Myth: Meaning of “Loyalty” Misunderstood

Product Profitability Analysis ►Customer Experience Optimization Myth: Companies should do the most for their most

In-store / Online / Phone / Direct loyal customers. Many companies in variety of
►Demand Forecasting
industries have loyalty programs. The practice, which

Product Level ►CRM Platforms & Technology
is based on rewarding frequent buyers, started with

Geography Level
Assessment & Roadmap Development airline industry almost two decades ago, was then

Customer Segment Level
Package Evaluation, Selection, Implementation adopted by other members of the travel industry, and
and Customization
►ROI / Cost Analysis has now spread to other industries ranging from
►Risk Management telecom to retail trade.

Marketing Programs / Campaigns

Retention / Rewards / Loyalty Programs
Fraud Analytics The article discusses the myth at the foundation of

Product Level
Credit & Collections Analytics these programs, that providers should do the most
for their loyal customers, and puts forward a new
paradigm where loyalty is defined as an intrinsic
301 Route 17 North, Suite 800 • Rutherford, NJ 07070 customer quality as opposed to the outcome of
888-291-2220 • 201-224-9075 Fax • www.c-metrix.com marketing efforts.