Beyond the Black Box: Revolutionizing Customer Retention with Explainable AI

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Customer Experience (CX) / Customer Intelligence / Customer Retention

Beyond the Black Box: Revolutionizing Customer Retention with Explainable AI

In the ever-evolving landscape of subscription businesses, AI is reshaping the game. It’s predicting high-risk customers, automating customer service responses, and bringing efficiency to the forefront. However, many enterprise churn prediction solutions deploy black box AI, that’s good with crunching data and scoring customers but lack the ability to explain how specific customer scores are derived.

So, what could be the financial impact of your agents getting blindsided due to the opaque algorithms? Let’s explore with a scenario.

Imagine your models flagging 10,000 customers as high-risk. With no insight into the risk scores, your agents offer a generic $120 annual discount to all, hoping to retain them.

However, if these customers are set on canceling, a discount won’t change their minds without addressing the underlying issues.

On the flip side, if all 10,000 customers accept the offer and renew, it costs $1,200,000.

Without resolving their issues, they may become high-risk again, necessitating another $1.2 million just to retain them again in the next year.

In a nutshell, any AI solution that doesn’t empower your frontline reps with the context of churn risk makes little business sense.

Enter Explainable AI (XAI) that adds crucial context on a customer’s cancellation risk by answering key questions:

What is the risk score for a customer?

What are the top factors that influenced the score?

What specific needs did the customer discuss in prior interactions?

What can be done to reduce the risk and retain the customer?

Which customers are price-sensitive?

Will they accept a particular offer?

Is XAI for everyone?

Absolutely. Unlike many modern technologies that demand a steep learning curve, XAI stands out for its ability to reveal drivers of specific insights and embed action within predictions. It seamlessly integrates with your existing CRM systems and other customer-centric tools, offering a non-intrusive implementation that saves both time and effort – making it universally accessible.

Now, let us delve into a tangible success story highlighting the impact of XAI.

Brinks Home, a top-tier smart home security provider in the US, harnessed XAI to generate over $100 million in customer lifetime value (CLV) by

  • Accurately predicting cancellations
  • Creating targeted offers by grouping customers into microsegments
  • Empowering agents with proactive risk mitigation strategies.

To understand the complete action plan of how Brinks Home turned data into actions, we have organized an exclusive webinar featuring Veronica Moturi, SVP of Customer Experience at Brinks Home. Through the course of this session, she shares insights into the role of Explainable AI in operationalizing attrition predictions and how it empowered contact center agents with relevant risk recovery actions.

Watch this transformative webinar, learn from a real success story, and elevate your customer retention game!