Improving Account Retention

Organizations with large numbers of accounts have an important challenge: how to maintain a low attrition rate by servicing well in a mass-servicing mode.

It's almost a contradiction - servicing well and mass-servicing. We've all had the experience of being mass-serviced -- by our phone companies or credit card processors, for example. In too many cases, we feel ill-served as we perceive our needs are secondary to the supplier's need to keep servicing costs low.

In a recent assignment, I worked with an organization that had thousands of accounts and a service organization that was run by protocols for servicing. These protocols governed how often an account should be called and what questions should be asked. Despite the fact that the service organization followed these protocols, their rate of client attrition was growing. This fast growing organization was finding that attrition was becoming a significant "headwind" for overall growth. They needed to solve this problem. But how?

The Approach

We looked at the client lifecycle and determined that the nature of risk was different during different stages. In this case, it made sense to look at 4 stages of the lifecycle:

1. During the implementation phase and shortly thereafter
2. The steady state in which accounts are serviced and hopefully kept satisfied
3. The period immediately after a notice or threat to cancel
4. The time after the relationship has ended and during which the account should be re-sold

In each phase of the lifecycle, we examined the unique risk factors of each stage. We identified the quantitative and qualitative characteristics of high risk and low risk accounts, and the proactive vendor behavior that would most likely have the desired retention effect.

To support the institutionalization of what we learned, we designed special reports that would rank accounts in terms of their posession of risky attributes, and developed business practices that would lower risk. It should be noted that we did not really have to develop these items from scratch because (as we have found in most companies) there were islands of best practices already in existence. I say "islands" because these great practices were not generally documented or shared, but I also describe them as "best practices" because they actually worked well. The trick was finding these best practices - once we found them, it was straighforward to document and distribute them.

Feedback Loops

Once we developed quantitative ways to identify risk, we "automatically" had a way to guage the effectiveness of the techniques for reducing risk and the people using those techniques. If, after an intervention, the quantitative measures of risk had not gone down, we could conclude that either the technique or the preson using it were not effective. When this happened, the retention process called for an escalation. While the more expert resources were scarce, this escalation process triaged accounts in a manner that saved the experts for the cases where they were really needed.

How can you use these techniques?

If you have a need to improve your account retention results, FourThought Partners can help. We will help you identify what the best in your service organization already know, improve it, and roll it out in a controlled way.

We are so certain that these techniques will work that we're even willing to bet part of our fee on the results delivered.