Laure van Ravensberg
Here at Relay42, we celebrate the successes of our customers as ours. So when we heard that the marketing team of Vattenfall had managed to decrease their churn rate by 1.12% while achieving a return on advertising spend (ROAS) of 888%, we couldn’t wait to share their story.
To tell us all about the case study, we sat down (virtually) with Laure van Ravensberg, Digital Marketer at Vattenfall, and the project manager for this project.
As a leading European energy provider, one of Vattenfall's main long-term strategic pillars is the digitalization of the entire energy value chain in order to leverage flexibility and better serve their customers. As we’ve written previously, data-driven marketing is in the heart of Vattenfall’s digital marketing team and their strategy is fully focused on providing a personalized experience across all channels of the customer journey.
As such, in her role within the digital marketing team, Laure was looking for opportunities that would drive digital transformation within Vattenfall. Having strong expertise in both programmatic marketing and web analytics, she had the technical background and the strategic approach to be able to expertly spot opportunities across different teams.
Her first step was to organize an internal customer journey session to give different departments the chance to discuss their current challenges. The idea was to use this brainstorm as a way to identify the project that would bring the most value, and in the end, they all agreed that they wanted to shine the spotlight on customer retention.
The first step of the project was choosing a method that would allow the marketing team to recognize the right customers online, and most importantly, making sure that this method was compliant with the European privacy law (GDPR).
Ultimately, the marketing team decided to use recognition based on anonymized email addresses from their CRM system. They evaluated a few channel options and finally chose the Facebook and Instagram display network, as it offers a relatively high recognition rate via (hashed) email addresses compared to other channels.
“There are a few available methods for recognizing customers," explains Laure. "However, the main requirement for us was to choose a method that was protecting the data of our customers according to the European privacy regulations. It sounds like a small step — but this is a crucial one to even get approval to start the use case.
“It was crucial to ensure that we protect the customer information in the right way, which included anonymizing the email addresses, using the right security hashing algorithm (SHA) for Facebook, and making sure that there’s no personally identifiable information (PII) going into the Relay42 platform.” Laure worked with specialists from both the Vattenfall Customer Intelligence team as well as the dedicated Relay42 consultant Yannick Debije to ensure optimal compliance on this project.
For a bit of context, energy contracts In the Netherlands are very similar to mobile phone subscriptions, in that there are a number of energy supplies and every household can choose the one that suits them best. Contracts are usually at a fixed rate for at least a year, after which the rate becomes variable depending on the market. As such, it's not uncommon for people to switch providers just before the end of their fixed period in favor of a new provider with a more beneficial fixed rate.
As you can imagine, that makes customer retention a challenge, which is why the Vattenfall marketing team decided to target customers whose fixed-term contract was coming to an end. As the CRM and website were already connected to the Relay42 platform, it was only a matter of setting up the right selection groups in Relay42 based on contract expiration date.
Prior to this use case, Vattenfall was reaching out to customers via email and phone about a month before their fixed contract was due to expire. With the Customer Retention use case, the communication with banners on Facebook and Instagram would now start two months earlier, increasing the awareness of the benefits for loyal Vattenfall customers.
The proposition: Staying with Vattenfall pays off. The banners communicated the extra benefits that customers would get if they continued with Vattenfall instead of switching to another energy supplier. The banners also promoted a special offer that would allow customers to extend their fixed term.
“We communicated that we valued our customers. Although we also included an offer, the main goal was not getting conversions but convincing our customers to stay with us — and they did,” says Laure.
The main business goal for the use case was to decrease the customer churn rate. However, since this was the first digital customer journey focused on customer retention, the team’s main goal was to test and learn from the experience.
“In terms of KPIs, we hoped to be able to decrease the churn rate by 0.5%. But to be honest, this type of use case had never been done before and we had no idea what we could expect.”
How do you prove the value of a case focused on customer retention?
“The main problem was there was no fixed baseline for customer retention that stays the same throughout the year or year-on-year," explains Laure. "So the only way to measure the result was to do an experiment with test and control groups.”
The marketing team was able to recognize 52% of their audience in the test group, which meant that in order to prove the value of the use case they would have to determine the statistical significance. “Only after we weighted the data did we realize how high the significance was: 99.19% — the highest I’ve ever experienced in my practice.”
The result was way beyond the expectations of the team — a statistically proven reduced churn of 1.12% and an 888% return on advertising spend (ROAS).
An extra added value to the case was a customized dashboard that shows the results of the use case in real time.
“People are naturally resistant to change, so having a dashboard visualizing all of the most important metrics really helps to show other teams that the use case works.”
Another key learning from this use case is that it proved the value of a banner. “Simply telling your customers that you value them is a powerful message that motivates them to stay with you. In the age of ad blockers and banner blindness, proving that display advertising can work so well demonstrates that this channel is still relevant.”
When you have a successful use case, the next logical step is to build on it. The Vattenfall marketing team has already expanded the banners with a video and is working on new ways for increasing the customer recognition match rate.
Of course, the long-term value of this use case lies in the fact that Vattenfall can now distinguish customers from prospects online and thereby create truly personalized customer journeys. Being relevant while simultaneously decreasing unnecessary advertising costs is a big step towards making Vattenfall future proof and towards fulfilling their mission to best serve the needs of their customers.
“Don’t be shy to share the results of your use cases with the rest of the organization. Take your time to explain in simple terms what your project was about and why it was important. Especially when you’re working with other teams, make sure that you acknowledge that it was a team effort and that you recognize the role of each team member for the success of the project.”
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