We helped a leading Insurance firm harness the power of machine learning to deliver prevention marketing strategies that mitigate customer churn and unlock revenue.
KubrickPredicting Customer Churn
The challenge
- In the hyper-competitive insurance market, where consumers are inundated with offers and options, customer churn is one of the greatest threats to sustained revenue growth.
- Traditional marketing methods lack the necessary analytics capabilities to accurately predict at-risk customers, leading to wasted campaign efforts and resources, as well as ineffective messaging strategies.
- A renowned insurance firm looked to Kubrick to use machine learning to identify the customers most at risk of churn in order to improve their marketing strategy with more accurate targeting and messaging to drive valuable retention.
The solution
- To address the challenge of identifying at-risk customers, Kubrick developed a comprehensive churn prediction model, using advanced machine learning techniques, optimized with time-series validating and fine-tuning.
- Trained using an extensive set of historic customer data (85,000 churn events and 345,000 non-churning observations), the model determines risk indicators, behaviors, and demographics to categorize customers into levels of churn risk.
- The model is enhanced by automated data ingestion and reporting, ensuring real-time insights that enable timely intervention.
The results
- Enhanced Churn Prediction: By categorizing customers within specific timeframes, the tool indicates the customers who 50-75% likely to churn within the next 6 months for effective intervention. With a model accuracy of 70-80% in initial trials, the tool delivers a 10% reduction in customer churn at the lowest bound of possibility.
- Optimized Marketing Spend & Attributable ROI: Improved targeting and messaging on at-risk customers eliminates wasted spend while providing the marketing team with clear ROI on mitigated churn, exceeding $220,000 for a 10% churn reduction.
- End User Adoption: The tool has a 100% adoption rate in the marketing team, driving YoY ROI and expanding the use case into other areas of Customer Lifetime Value attribution to continue driving optimized marketing that delivers revenue growth.
