Wednesday, April 16, 2008

LTV at LTC: After the Project -- Education and Explanations

When the LTV project was rolled out and data was being published I immediately found myself with two new tasks: educating the company about the LTV project and explaining why particular customers got negative value.

I anticipate that education will be part of any analytic project. The most important decision we made about education was to explain everything. There was no part of the LTV system that we did not discuss and even give specific parameters for. Explaining everything allowed people to understand the LTV system.

What really made people accept the LTV system was being able to answer why particular customers had negative scores. In particular we got a number of calls from Customer Care. LTV had been integrated into the Customer Care system and it effected what kind of equipment offers could be made to customers. The Customer Care department needed to know why some high-revenue customers were getting low or negative value.

We were able to answer questions like this easily and convincingly. As it turned out, the usual reason high revenue customers had negative LTV was because they hadn't actually paid their bill in a number of months. Being able to answer these questions went a long way to establishing our credibility.

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