RetentionProfitWithPredictiveModeling
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Variables:Improvement:Revenue:
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Number of customers:500,000Without campaign$0.00$35,000,000retained X LTV
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Average remaining LTV:$350
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Defection rate:80%
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Campaign cost / user:$175With untargeted campaign($3,500,000)$31,500,000retained X (LTV - cost) + respondents X responserevenue
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Revenue per response:$350$17,500,000
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Campaign hitrate:20%$14,000,000
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Defection segment percent:40%With targeted campaign$3,640,000$38,640,000nonsegretained X LTV + segretained X (LTV - cost) + segrespondents X responserevenue:
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Segment lift:1.15$29,400,000
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$2,800,000
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$6,440,000
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Segment defection rate:92.0%
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Nonsegment defection rate:72.0%
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Key:
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empirical inputs
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assumptions
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derived values
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Scenario: Aggressive retention offer to one-time customers.
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Note: This is a forecast model that assumes predictive
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analytics is in play, but this isn't predictive analytics itself.
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Copyright © 2007 Prediction Impact -- www.PredictionImpact.comAssumption: Campaigning a customer who would have stayed anyway lowers remaining LTV for that customer.
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Profit Forecast