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AIROI - Artificial Intelligence Return on Invest: The AI strategy for decision-makers and managers

25 January 2025

Customer scoring: This way you won't miss out on any more valuable customers!

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Customer scoring helps companies to systematically recognise valuable customers and provide them with optimal support. This structured approach promotes targeted marketing and sales strategies so that no important customer is lost. Companies that use customer scoring benefit from in-depth knowledge about their customers and can utilise their resources more efficiently.

Customer scoring as the key to a precise customer approach

Customer scoring classifies customers based on various criteria such as purchase history, frequency of interactions or predicted value. This enables companies to better understand and target individual customer segments. For example, retailers optimise the focus on customers with a high propensity to buy, while banks differentiate risk customers using credit scoring. Online shops also use customer scoring to segment customers in order to send customised offers or vouchers.

In the insurance sector, the method supports churn management by recognising customers at risk of churning at an early stage and supporting them with special retention measures. In this way, insurers stabilise their customer base despite market changes. In e-commerce, on the other hand, customer scoring models identify customers who particularly benefit from up-selling or cross-selling, thereby sustainably increasing sales.

The versatility of customer scoring is particularly evident in the implementation of personalised marketing campaigns that are precisely tailored to the needs of individual customer segments. Marketing teams from the telecommunications industry often report significantly increased conversion rates when scoring-based approaches are used.

BEST PRACTICE with one customer (name hidden due to NDA contract)

The use of customer scoring enabled a leading telecommunications provider to establish a personalised customer approach. Analysing customer history and usage data enabled the development of a scoring model that identified particularly valuable customers. Based on this, targeted campaigns were launched that resulted in a significant increase in customer loyalty and new customer acquisition, accompanied by better resource allocation in sales.

How customer scoring supports companies in customer care

A key advantage of customer scoring is the early detection of customer churn. Insurance companies use scoring models to identify contracts at risk and proactively offer personalised advice. This increases the chance of contract renewals and strengthens long-term customer relationships.

Scoring is also used in retail to win back inactive customers. For example, fashion companies can send targeted mailings with special discount promotions to customers whose score indicates a lower level of activity. This often leads to an increased reactivation rate.

Customer scoring also helps marketing teams to better predict the chances of success of campaigns and utilise budgets more efficiently. Credit institutions, for example, use risk assessments to target credit offers to customers with a high probability of repayment and thus minimise default risks.

BEST PRACTICE with one customer (name hidden due to NDA contract)

A large financial services provider was able to optimise its lending through customer scoring. The model integrated data from various sources such as transaction histories and credit checks to determine the default risk score. As a result, the default rate was reduced by over 15 %, while at the same time more customers with good scores were served, increasing profitability.

Practical tips for implementing customer scoring

For a successful implementation, it is advisable to work step by step and initially ensure high-quality data. Incomplete or incorrect data significantly impairs the validity of the scores. Also pay attention to data protection compliance, especially with sensitive customer data.

Successful companies involve various departments - from marketing and sales to customer service - in order to organise the customer scoring process holistically. This ensures that the findings are utilised sensibly in all departments.

Regular updating of scoring models is important in order to take account of changes in customer behaviour and market conditions. Tools with automated updates facilitate this process and enable immediate customisation of the customer approach.

BEST PRACTICE with one customer (name hidden due to NDA contract)

An international retailer implemented a customer scoring system that is updated on a weekly basis. By integrating purchase and interaction data as well as social media insights, customer segments were defined more precisely and flexibly. The marketing department benefited from the ability to adjust campaigns in real time and thus sustainably increase the conversion rate.

Customer scoring as a strategic management tool

In the long term, customer scoring helps companies to promote growth and increase profitability. It makes customer contact more efficient, reduces wastage and ensures better customer loyalty. The insights gained support management in planning new products, expanding services or organising investments.

Companies from the insurance industry often report that customer scoring has helped to increase service quality and measurably improve customer satisfaction. At the same time, customers remain more loyal and the risk of churn decreases.

Digitally oriented companies also use scoring models to target potential new customers and provide existing customers with intensive support through personalised customer journeys. They are supported by big data analyses and artificial intelligence in order to continuously refine scores.

My analysis

Customer scoring offers sustainable added value when dealing with a heterogeneous customer base. Companies benefit from more precise insights into purchasing behaviour, risk factors and loyalty. With the support of iROI coaching in customer scoring projects, clients receive expert guidance and customised impulses. This allows individual challenges to be addressed and best practices to be implemented, resulting in less wastage and greater marketing efficiency. Overall, customer scoring helps to avoid missing out on valuable customers and increase profitability in a targeted manner.

Further links from the text above:

Customer scoring: definition, methods, use cases - DinMo [1]

Megatrend Customer Scoring - PwC [2]

Customer Scoring: Definition and Benefits - Skeepers [3]

5 Benefits of Customer Scoring and Segmentation | JustCall Blog [5]

How a scoring model helps companies make sustainable progress [6]

For more information and if you have any questions, please contact Contact us or read more blog posts on the topic internet Return on Investment - Marketing here.

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Customer scoring: This way you won't miss out on any more valuable customers!

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1TP5Customer approach #Customer loyalty #Customer segmentation

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