By Morten Suhr Hansen
In the past couple of weeks, my colleague Niels Vestergaard has delved into some of the tools that subscription businesses will use in the future, and there is one keyword that stands out: Artificial Intelligence.
Many of the frustrations that subscription companies face today can become much easier in the future with the implementation of the right AI tools. And it doesn’t actually have to be extremely extensive to implement. Your business can get started with implementing AI in various areas of your operations and derive direct business value within a few months – if you have the right data and the right guidance.
AI tools are too strong to ignore – especially within Churn Prediction
The report covers six areas where AI will play a significant role for subscription businesses and provides concrete suggestions for the tools you can use to get started today. And at a management level, the topic of Churn Prediction may be particularly interesting.
Just a few years ago, building prediction models that could warn about churn based on specific subscriber behavior (or lack thereof) required a team of skilled data experts. However, with the new AI tools available, even small and medium-sized companies can set up models that function as an alarm system when customers are about to leave. Moreover, most of these new AI tools can even generate personalized content for subscribers, allowing you to automate the retention process entirely. It’s a smart approach, but artificial intelligence is only as good as the data it has to work with.
Have a clear data foundation, before implementing an AI solution
And I am not overly optimistic about these new possibilities. It is still highly relevant for those who take churn seriously to have skilled people on board who understand how these models should be interpreted and built. However, that doesn’t mean that the tools cannot be useful for those who lack the know-how, resources, or experience to hire data specialists for their teams.
However, it is crucial to have your data foundation in place before implementing these AI tools. Just like the beloved Chat-GPT, the tools are only as good as the data you feed them.
Therefore, there are fundamental behavioral and metadata aspects that need to be in place before you can identify the behaviors that lead to churn. This becomes even more important if you want the tools to generate personalized content for subscribers. If not done correctly, it may come across as mechanical and impersonal, which goes against the principles we adhere to when working with subscription-based businesses.
Read the report, check your data foundation & remember the right guidance
I would recommend that you browse through the report to identify any areas where you can improve or strengthen your business without hiring new employees.
If you come across one or more tools that you believe can enhance your customer retention or understanding, make sure to review the customer data you collect and assess whether you have enough data – and the right data – to initiate more automated processes. Hopefully, this will lead to measurable results that provide direct value.
