Case Study: Predictive Segmentation Helps RetouchMe Retain High-Value Customers and Improve Average LTV

Challenge

As online businesses grow and expand their services, they often struggle to maintain high customer satisfaction levels. A sudden influx of new customers may cause order fulfillment delays and the churn rate eventually goes up.

The team behind RetouchMe, a mobile photo editing app with more than 1 million downloads, was looking for a way to optimize their workflow and increase the average LTV.

Solution

Rather than trying to retain every new customer, a potential solution would be to direct more effort to promoting customer loyalty for high-value customers.

Our Data Science team is creating custom AI solutions to help our clients meet their business needs. Among them, a solution that helps online businesses identify potential VIP customers as early as possible, prioritize their orders, and focus on delivering the best-quality service to these customers.

Results

• The AI solution by our platform identifies potential VIP customers with 99% accuracy within 7 days after the first order.
• Implementing the AI solution brought a quarterly 35% increase in the number of VIP customers and a 17% increase in the quarterly income.

Background

RetouchMe, a mobile photo retouch app, entered the market in 2014 and quickly gained popularity. People loved the service because they got their photos edited within less than 15 minutes by a team of photo retouching professionals.

In 2017, the number of users started growing fast. That said, 50% of the company’s revenue was coming from only 2% of the customers. The influx of orders increased the designers’ workload, which caused delays in order fulfillment and undermined the quality of the service. The company started losing customers and was looking for a way to optimize their daily workflow processes for better customer loyalty and higher LTV.

How This Works

Our Data Science team has developed a new customer experience strategy and a custom AI solution for RetouchMe. These solutions are aimed at maximizing the number of customers in the VIP segment and increasing their lifetime value.

• The AI system identifies potential VIP customers among the newcomers with 99% accuracy. It analyses a set of weighted parameters, such as order frequency, retouch preferences, discounts used, frequency of redo requests and more.
• The AI predicts when a customer will place the next order and estimates how quickly the order should be processed. Orders placed by VIP and potential VIP customers are processed within an optimal time of 3 minutes 30 seconds.
• The AI analyzes the behavior of the existing VIP customers and identifies segments for customer retention program.

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Takeaways

• Deep analysis of business data and churn analysis can help you find the key criteria for providing high-quality service to your customers.
• Introducing AI solutions is a good way to optimize your workflow and effectively segment your customers.
• Identifying high-value customers at early stages of customer lifecycle will enable you to promote customer loyalty and drive revenue through offering best-quality service to these customers.