The simple truth is this: churn rate optimisation — reducing the number of customers who abandon your product or service — is far more essential to your profitability and long-term success than conversion rate optimisation.

 

New Zealand Post is part of the national landscape, integral to the Kiwi way of life for nearly 180 years. They are evolving and developing their business to meet the changing needs of their customers. 

 

 

The Problem

 

NZ post had concerns with the level of churn within their commercial customer base. It was difficult knowing which customers were leaving and why they were leaving. Each person in the telecommunications team can look after up to a few hundred customers each, they didn’t know which customers to focus on.

When Mindfull met with NZ Post, they were in the process of putting in place a new customer retention strategy. It became apparent that the need to better understand their customers was critical to this objective. This was vital as the only way to reach and connect with a customer, the only way to influence a customer’s buying decision and keep them coming back is to understand their buying behaviour and satisfaction with NZ Post.

 

The Solution

 

After really listening to NZ Post and finding out as much as we could, we began collaborating and evaluated several solutions. It was decided that a Mindfull predictive churn model was the answer.

First things first, both parties had to understand and agree on what exactly constitutes ‘churn’ as NZ Post sees it. Next, a predictive model was implemented providing a view of the customers who were most likely to churn. This provided a view of the most high-risk customers and gave telecommunication managers an area of focus. The telecommunications team is now able to achieve much more in less time.   

 

Benefits Gained

 

So, what does this all mean? NZ Post are now able to truly understand the key drivers of customer churn, they understand what they do well and what they don’t do so well. This kind of information is a nugget of gold that can be used organisation wide. Not only that, they have the visibility of those customers who are likely to churn in the next period. This means being able to implement an effective churn mitigation strategy allowing NZ Post to increase customer retention and ultimately deliver better service to New Zealanders.

 

 

The MINDFULL Model

 

By really listening to NZ Post, assessing all possible solutions and developing a Mindfull solution tailored to suit, Mindfull was able to empower NZ Post to take a proactive focused approach in implementing their customer retention strategy.

 

“Right along the process they have been accommodating. They listened to what we wanted and came back with good, practical solutions to get to the right outcome.”
 
“The way they operated with our business was quite seamless. Their developers are not sitting in a dark room somewhere – these guys were onsite with us, interacting with us.”

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New Zealand Post

New Zealand Post /

Local Government

A city like no other

 

Previously the Council utilised MS Excel, having no fewer than 225 spreadsheets to collect, collate and analyse the budget managers’ plans. Drawbacks of the old model included having to manually convert information from disparate sources into a readily usable form, and the huge effort required simply to maintain the spreadsheets and process the data.

 

 
 

"Challenges encountered during the project included the inconsistency of existing accounting hierarchies and processes, and changing legislative and reporting requirements."
 
 


The Council evaluated a number of solutions and service providers and selected Mindfull to assist with the implementation of IBM Cognos TM1. The solution was selected for its speed in processing and features such as tight integration with MS Excel and its ease of use, as well as the expertise and experience of the Mindfull team. Mindfull had previously completed a number of other TM1 implementations at councils. Its staff provided confidence through their demonstrable understanding of the particular requirements of local government planning processes.

 

 

 
“Mindfull's approach and expertise, working in partnership with our knowledge of our business, has given us both the confidence of a robust solution”
- Graeme Trevathan, Manager Business Advice, New Plymouth District Council
 

 


Initial Success

 

The core of the project spanned ten calendar weeks and covered inception, specification, implementation, reporting, documentation and training phases. The IBM Cognos TM1 solution was used to collate information from different business managers with respect to their operating expenses, capital requirements and proposed new projects. This information was immediately available to the budget reviewers through TM1’s instantaneous consolidation functionality.

 

 

Additional functionality delivered included the ability to:

 

  • create an internal cost allocation profile based on input costs

  • calculate and report in detail on inflation as per reporting requirements

  • simulate and reallocate changes in costs, based on parameters (interest rates, inflation rates, %, etc)

  • phase expenditures and revenues into monthly periods based on predetermined

  • profiles

 

Subsequent Projects

 

After the initial implementation, the Council opted to change its ERP.  For Mindfull this meant pointing TM1’s data import processes to the new tables, a simple task that had no impact on TM1’s end users.

 

 

New modules have also been added to TM1, including:

 

  • modelling of Roading subsidies

  • modelling of movements in Reserves

  • mapping of transactions between related accounts


Future

 

Future directions for the Council will include analysis of targeted costs, revenues and values. The simulation of general rate requirements and borrowing and loan repayment requirements will be merged into the system. Key performance indicators and the simulation of capital costs will also be considered at a later date.

 

The Council has embarked on an exciting and challenging journey that has been eased by a smooth transition into the IBM Cognos TM1 business intelligence system.

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New Plymouth District Council

New Plymouth District Council /

Local Government