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Assumptions
Customer Base: 5000Cost Per Sale: $150
Cancellation Rate: 1.5% per month (Industry Standard)
To Remain Steady
You would need to acquire 900 new customers at a cost of
$135,000.
To make what you made last year!
Triangle Pest Control Case Study
4:00 am text from Donnie:
Jesse, We need to look into our retention numbers.
In 2014, TPC was doing everything right.
Effective Treatments
Great Customer Service
Outstanding Team Members
Because customers expect to get what they pay for.
Effective Treatments
Great Customer Service
Outstanding Team Members
The numbers...First, they dove in to PestPac and found their Y1 and Y2 cancellation
rates per service.
Recurring Pest
Cancellation
Y1: 30.5%
Y2: 23.3%
Recurring Hybrid
Cancellation
Y1: 11.2%
Y2: 23.7%
Break it down.
They then broke this down by what month the cancellations were
happening and found that most cancellations occurred
between 8 and 16 months.
Retention = Profitability
Keeping a customer for 12 months vs 6 months showed a
300% increase in profitability.
So what did they do?
They instituted a customer retention system that focused on proactive and
reactive measures.
The proactive measures...
They used surprise reciprocity to keep their customers during the
top cancellation months.
The proactive measures...
Month 7: Credit towards month 8
Month 11: Free add on service for month 12
Month 15: Free of service for month 16
Month 24: #customer4life
Go above and beyond...
Carry the newspaper to the front door
Take up the empty trash cans
Help bring groceries in the house
The reactive measures...
When a customer called in to cancel CSR’s could offer:
● Discounts on the service
● A free month of the service
● Free months of service up to the CPS
The reactive measures...
Identified the 2 most common reasons for canceling:
● Moving
● No Need for Service
THE RESULTS
They saw a drastic 37% reduction in cancellations.
2013: 28.51% Cancellation Rate2014: 17.94% Cancellation Rate
THE RESULTS
They saved $71,340 in recurring revenue the first year.
2013: $348,276 Lost Revenue2014: $276,936 Lost Revenue
THE RESULTS
If TPC had the same 28% cancellation rate as 2013, they would have lost $382,981 in
recurring revenue.
Hiring the right people...
“What is the difference between customer service and
customer experience and what do you think makes a bigger
impression on the customer?”
Training new hires...
They recently added their customer retention strategies into
their onboarding training and have pop quizzes to ensure all
new hires know what is expected of them.
Incentivizing employees...
Tie customer customer service scores and retention numbers to
employee bonuses so that they have a stake in the game.
HOW CAN YOU DO THIS?
1. Identify your top cancellation months
2. Develop a proactive plan for drop off months
HOW CAN YOU DO THIS?
1. Identify your top cancellation months
2. Develop a proactive plan for drop off months
3. Create reactive scripts and processes
HOW CAN YOU DO THIS?
1. Identify your top cancellation months
2. Develop a proactive plan for drop off months
3. Create reactive scripts and processes
4. Train employees on the what, why, and how
QUESTIONS?Lauren Brown, Account Director
Coalmarch Productions
linkedin.com/in/laurenhenderson1