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Customer Relationship Management (CRM)
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Customer Relationship Management (CRM)

In general definition, CRM involves a series of process including analyzing and integrating customer information of a company, planning marketing tactics based on customer characteristics, and providing support, evaluation, and feedbacks to the client. Through these processes, companies will be able to differentiate customers in the point of customer value maximization and ultimately fulfilling their profit.

A successful CRM requires customer differentiation resulting in maximizing customers' values. Performance in Customer Value Segmentation, Life-time Value (LTV), Loyalty, Churn Prevention and Cross-selling via valid statistics technique is also crucial in achieving the ultimate success in CRM.

CRM Process
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Customer Value Segmentation

The optimal standard and number of customer value segmentation may vary in accordance with a company's purpose. General CRM approach operates on Value-based segmentation, and utilizes Need-based segmentation for sub-segmentation method.

The core of customer management is to divide customers into groups based on loyalty and profitability, and to activate customer shift in optimal ways by adding viable policy factors.

LTV (Life-time Value)

LTV is the sum of financial contribution a customer would provide to a company throughout his/her involvement with the company.
LTV is measured by weighting the customer's historic/current/potential value.

Loyalty

"Divides customer groups according to their profitability and loyalty. Each group is subject to different marketing programs, as listed below.
- Value group (tier1) : Loyalty Program
- Value group (tier2) : Cross-selling / Up-selling
- General customer group (tier1) : Churn Prevention Program
- General customer group (tier2) : Demarketing
Implementing Loyalty marketing program among VIP customers will lead to significant increase in revenue."

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1.a group of core good customers: recommended to practice Loyalty Program and encourage the customers to be life-time customers.

2.a group of customers with significantly lower re-purchase rate: encourage the customers to repetitive purchase.

3.a group of customers with high profitability equivalent to value group (tier1): recommended to promote loyalty of the customers.

4.a group of customers with relatively high profitability: subject to Churn Prevention

5.a group of customers with high loyalty equivalent to value group (tier1): encourage the customers to customer activization for client benefit promotion.

6.a group of customers causing profit loss: encourage customers to leave the market.

Churn Prevention Program

"The key to churn prevention program is i) to whom, ii) through what system, and iii) which system to apply to. The following are the steps of churn prevention.
1. Develop a customer behavior model to understand churn characteristics.
2. Calculate churn score based on customers that are likely to display high churn prevention effect.
3. Analyze causes of churn and provide right offers as a solution, carrying out an effective churn prevention program.
The churn prevention model will allow you to understand characteristics and behaviors of churn group and to develop systematic churn prevention activities."

TYPE ISSUE SOLUTION
Right Customer conduct detailed analysis on ‘why’, ‘when’, and ‘who’ churns and build subsequent models establish churn prevention model by analyzing the cause and solution
define churn based on work definition and select corresponding program
Right Offer analyze cause of churn and prepare for prevention method,
offer expansion on churn management
classify controllable churn and uncontrollable churn, then establish offer based on cause and customer characteristics
establish offers that can not only benefit individual customers, but the entire customer group
Closed-loop establish organization, process, and system for churn prevention prepare organization, process, system that can make right offers based on churn models
Cross-Selling

교차판매 모형은 추가판매 대상고객을 선정하고 해당 고객에게 가장 적절한 상품을 제시하여 고객별 SOW(Share of Wallet) 수준을 향상시키는 방안입니다. 이와 더불어 고객 Loyalty의 증가로 이어져 경쟁력을 제고하는 효과를 가져옵니다.