Client: A $13 billion US travel, entertainment, and hospitality reservation platform
Situation: This subscription-based subsidiary was struggling with retaining fee-paying users at their 12-month promotional contract expiry.
Problem: The company suffered from a 58% attrition rate after one-year introductory rate expiration and an insufficient allowable cost for new members to continue with current acquisition programs.
Solution: Apply a Bayesian statistical inference model to focus on current retained subscribers and ignore all defectors’ demographic attributes and purchase behaviors.
Results: The program improved retention by 26% overall and over 50% in the top performing deciles. This translated to a positive campaign ROI and a recalibration of the organization’s acquisition target market audience selection strategy.