Customer Analytics with Aurelie Lemmens

Customer Analytics with Aurelie Lemmens

Today’s guest on The Property Management Show is Aurelie Lemmens, an Associate Professor of Marketing at the Rotterdam School of Management, Erasmus University in The Netherlands, and Academic Director of the Expert Practice on Customer Analytics at the Erasmus Center for Data Analytics.

Dr. Lemmens is an expert on the topic of customer churn and has written peer-reviewed papers on the topic.

Defining Customer Analytics

What does customer analytics mean, specifically to a property management company?

Here’s the general definition of customer analytics:

The idea is to leverage as much data as you can gather about your customer. You’ll want a good collection of data at the point of customer acquisition and even before that – when they’re visiting your website. You want data about the customer when they’re signing a management contract or filing a complaint. You want to collect data on that customer when they’re saying something positive or negative about you and when they’re canceling their contract.

Leveraging all that data with sophisticated analytics can help you decide what the best action might be for your customers at each of those points in time that we mentioned. You want to find the optimal action to reduce churn and increase profitability.

Mentioning data and analytics can sound pretty technical. But, these churn analytics can help you better understand why your customers are leaving and whether it’s worth your time and resources to try to keep them.

Studying Customer Analytics and Churn

Two main points are important to remember from the study conducted by Dr. Lemmens and her colleagues.

* First is the notion of incremental lift. What will be the impact of your marketing intervention on the customer? What will happen with the customer that would not have happened if you did not perform a certain action?

This sounds easy, but it’s actually pretty complicated because it’s hard to observe what’s happening based on what you didn’t do. How can you see the impact of choosing to take one action and not another?

* Second is the notion that all customers are different from each other. You have to recognize and understand all the different types of customers you are working with. Only then can you design an action that speaks directly to Customer A and not Customer B, who will have their own actions designed based on who they are and how they behave.

How should you choose which customers to work towards retaining? That’s another takeaway from this study.

Those Likely to Churn, Those Likely to Stay, and All the Others

When companies think about preventing churn, they tend to focus on identifying the people most likely to leave.

That’s the first step. Then, they’ll figure out what they should do to keep them from leaving.

But, if they’ve already made up their minds on some level to leave, can you really manage to keep them? Is it worth your time and resources?

This is a natural reaction. It’s tempting to try and prevent people from leaving when we’ve identified that they’re likely to leave. But, this strategy could have you retaining customers that are hard to retain or maybe not worth retaining.

There are also your customers on the other end of the spectrum. They are happy, and there is a low probability that they’ll leave. You don’t need to do much to keep them happy. They’re already there.

Those customers in the middle are where you should focus.

There’s no reason to believe they’re planning to leave but there’s also no reason to believe that they’...