Customer Conversion and Retention / Satisfaction Measurement Index

M

moneybin

#1
Hi,

I have a Software as a Service client who has asked me to put together an index to measure the satisfaction of the subscription base (retention) and the propensity (probability) for trial users to convert to a paid monthly subscription plan by the end of the trial period.

The client runs a "proposal making" website, allowing anyone to easily make proposals in minutes and send them out to clients through the website.

He has requested that the index be completely data driven, meaning:
- No customer interaction / survey
- No manual weightings to index elements
- Index elements built on the data held on each customer in the MySQL database
- Index composed by using statistical methods to derive the important factors to customer happiness

--------------------
Type of customers
--------------------
Trials (14 days)
Actives (On a monthly subscription plan)
Deletions

--------------------
Sample of data elements from the Database
--------------------
- Days since last login
- Account Created Date
- Total No. Users
- Total No. Active Users
- No. Users Made Proposals
- Total Proposals Made
- Total Proposals Sent
- Total Proposals Accepted
- Total Proposals Declined
- Total Proposals Exported To PDF
- Total Proposal Fees Created
- Total Project Fees Created

--------------------
Your help
--------------------

I need to identify what statistical methods, algorithms, or formulas I need to use in order to meet the two needs of my client:
1. Customer Happiness index, driven by the data
2. Probability a trial user will convert to a paid subscription

Your help is very much appreciated. Please let me know if you need any further information or clarifications
 
Elsmar Forum Sponsor

Jim Wynne

Staff member
Admin
#2
<snip>
I need to identify what statistical methods, algorithms, or formulas I need to use in order to meet the two needs of my client:
1. Customer Happiness index, driven by the data
2. Probability a trial user will convert to a paid subscription

Your help is very much appreciated. Please let me know if you need any further information or clarifications
Welcome to the Cove. :bigwave:

Your second item, about trial users converting to paid users, seems to have a simple answer if you know for a given period, say 2011, how many trial users converted to paid users. Strictly speaking this won't result in a rigorous probability number (because of variables not known and probably unknowable) and it won't account for trial users who converted after the trial period with different login credentials, but it should tell you something about likelihood.

As for a "happiness index" you first have to define what "happy" means if you're not going to ask users if they're happy, and what they're happy about.
 
M

moneybin

#3
Hi Jim,

Thanks for your quick reply. We believe we have all of the data necessary to say with an intelligent guess if a trial user will likely convert to a paid subscription and also for "gauging" the happiness of a paying subscription user.

One option we discussed was profiling recent customers who converted to form an "average profile" to compare "current" trial users against to measure how close they fit the profile. Does this sound like an appropriate statistical method to use to derive the probability we're looking for? :truce:

For the happiness index, we want to build something similar to the Dharmesh Customer Happiness Index:

lightpointsecurity.com/content/measuring-customer-happiness-dharmesh-shahs-2010-business-of-software-conference-presentation

:read: At the end of his 2009/10 presentation video, he discusses using a simple regression but I'm not sure if this is the correct approach we should take for gauging the satisfaction of the user base to continue to pay the subscription another month.

Looking forward to hearing your thoughts :)
 
J

JaneB

#4
I have a Software as a Service client who has asked me to put together an index to measure the satisfaction of the subscription base (retention) and the propensity (probability) for trial users to convert to a paid monthly subscription plan by the end of the trial period.

The client runs a "proposal making" website, allowing anyone to easily make proposals in minutes and send them out to clients through the website.

He has requested that the index be completely data driven, meaning:
- No customer interaction / survey....
Concur with Jim's advice - if you're going to measure 'happy', then you must know what being 'happy' comprises.

I'm somewhat puzzled when you say your customer has demanded an index of measuring the 'satisfaction' of the subscription basis, but this must be done without any customer interaction!

I fail to see how you can assess 'satisfaction' without any customer interaction. Or is the word 'satisfaction' actually being used to mean something else?

If I understand it correctly, the process is:
  • as a customer, I create a/some/many proposals using your client's website, and send said proposals out to my clients.
  • Your client then wants to know if I and others customers are 'satisfied' and will take out a sub/continue subscribing. The proposal is to do that without any further interactions with any customer.
Correct?

If so, my response is: huh? :nope:

I'll be interested to hear if you find something that works. I cannot see it, but that may be just my viewpoint. But then, I don't see why one would forego any opportunity to get any kind of interestion and feedback from customers, prospects and leads.
 

harry

Trusted Information Resource
#5
.......................... I fail to see how you can assess 'satisfaction' without any customer interaction. Or is the word 'satisfaction' actually being used to mean something else? ...............................
Perhaps he is thinking of prediction using regression methods!
 
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