For a service provider, being able to anticipate its customer's behaviour has three major benefits. It can generate customer delight, prevent customer exhaustion, and improve the company's ROI. Let's look at each of these benefits through three different use cases in the Customer lifecycle: Complaints Management, Customer Upsell and Customer Retention.

Generating customer delight by anticipating and pro-actively managing their complaints

A dissatisfied customer, filing a complaint is difficult to manage. He is very often passionate about his claim - whether it is justified or not - and there is sometimes little which can be done to change his perception and his opinion towards the service he initially subscribed to.

If however the company could tell precisely which customers are going to complain and when, it could avoid the management of a complaint by calling them pre-emptively to enquire about their satisfaction and offer them an incentive or a boon. This would obviously go a long way in terms of building customer delight. Furthermore, this action would definitely improve the customer's overall experience and even increase the ROI of the relationship as very often, an preemptive outbound sales call is way cheaper than a complaint management process.

As a customer, have you ever been called by your service provider to enquire on your level of satisfaction as you wanted to file a complaint and before you even had a chance to do it? Me personally never, but I'd love to be, and I don't despair because I know that some companies are doing it! This definitely goes a long way towards improving customer experience for sure.

Avoiding customer exhaustion by knowing when to contact them and upsell them a new product or service

Squeezing more value out of customers is in the line of sight of every service provider, especially in the telco / insurance business. There is obviously nothing wrong with that except the fact that if the customer isn't interested to be locked in with another contract for another 12-24 months, he is going to be disgruntled by an annoying phone call from an offshore sales rep trying to push for a service he's not interested in.

The main issue here is that the ROI of the outbound upsell campaign very often exceeds the cost of annoying your customers, with is furthermore not easily quantifiable. The consequence of a poor customer experience are however very real!

What if the company could identify prior to the campaign which of their existing customers would respond favorably to the upsell offer? This would have many benefits. The first being improving the ROI of the campagin by increasing the conversion rate, consequently reducing campaigns costs and optimizing the effort. It would also go a long way towards improving customer experience, because the company wouldn't exhaust its customer base by targeting a limited number of customers only.

Needless to say that it also could be taken advantage of to design tailored marketing actions for specific customer segments.

Improving your ROI by optimizing your customer retention programme

Beyond the customer complaint looms the customer attrition. Being able to reduce and eventually address customer attrition is the holy grail of customer marketing. The tricky part is that once the customer identified himself as a churner, the retention cost skyrockets and very often, the company has no choice but to let him go.

The company could very well setup a retention campaign but it would incur the risk of waking up the sleeping dogs, customers who wants to churn but are too lazy to do so. It really doesn't want to give them the opportunity to do so.

However, if the company were able to identify the potential churner beforehand, it could with a significantly lower retention cost prevent to customer from leaving the company, by surgically targeting high likelihood potential churners while leaving the sleeping dogs alone. This would increase the lifetime value of its customers, but furthermore, it would also help identify the root causes of attrition and give the company the possibility to act on improving the customer experience.

So... how is this even possible?

Until now I've described hypothetical situations which are win-win for both the service provider and its customers. However, their implementation would require the company to be able to read its customers' mind. Nothing less.

This is were a supervised machine learning algorithm comes in play. The general process is the following: