ACURA Strategy Development

ACURA Strategy Development

ACURA is an acronym that represents variant customer-related strategies including acquisition, cross selling, up selling, retention, and advocacy (Biswas, 2014). It is an important strategy in ensuring that both consumers and firms are able to find value through approaches within each of the five strategies in ACURA. It allows firms to design a variation of related approaches including promotional deals, offers on products, bundling, attractive alternatives, and many other strategies to not only acquire but also retain consumers and win them back in case of loss.

Cross-selling and Up-selling Strategy

For the low budget young customer segment, Raiz Invest Limited should cross selling will be among the most effective means to increase revenue. For instance, Raiz could provide bundled products in an attractive package for example enabling mobile payments on its digital lending and credit platform. It could also provide insurance on mobile loans as a way to increase revenue for a market segment that is focused on the product and its benefits while remaining consciously sensitive of price. In light of this, the most applicable cross-selling strategy that Raiz can use on the low budget young consumers is promoting products that other people bought, including any available offers and related items for the same.

Ghoshal, Mookerjee, and Sarkar (2021) advocate for recommending related items in a cross-selling strategy as one of the most effective ways to get price sensitive consumers to purchase. Similarly, offering discounts on bundled products is noted by Jayalath and Premaratne (2021) to rapidly increase sales for young consumers. Other strategies that apply to Raiz’s cross-selling strategy would include promoting products that are essential to another product’s performance. For example, if a customer takes a mobile loan, Raiz could offer an insurance package against delayed payments as a way of adding value to the original product. In this way, revenue is generated and the customer sees value in both products. Therefore, a cross-selling strategy is recommended for the low budget young segment of Raiz’s market. Bundling, recommending products, recommending related products, offering discounts on products and bundles, and promoting products essential to another product’s performance are the most effective approaches.

Retention Strategy

Retention is defined by Mahmoud, Hinson, and Adika (2018) as the ability to get an acquired customer to buy a product again. For example, when a customer renews their insurance package every year with the same agency for five years. To increase customer loyalty among existing low budget young customers, Raiz will need to employ excellent customer service on its platforms, offer bundled discounts and surprise gifts, and have a personal relationship strategy. Other strategies proposed by Gomber et al. (2018) include fast support, personalized interactions, meeting customers where they are, incentivizing loyalty. And gathering feedback on a regular basis. The idea is to boost loyalty through creating buyer relationships.

Raiz will also need a win-back strategies for lost customers. It will encompass a “we fixed the issue” campaign that addresses the reason why customers stopped buying a product or switched to a rival organization. There will also be incentives provided to win back customers. For example, discounted prices on previous bundled purchased over a period of time. Lastly, social media personalized campaigns will target interactions with consumers (Renjith, 2017). Recovery strategies in the case of product or service failure for the low budget young consumers will include free products for a trial basis, discounts, apologies, and coupon. For the unprofitable customers, no action will be taken, but instead products will be bundled up to ensure that they are either able to move up their spending curve or exit altogether.

Objectives

The objectives are focused on attaining the following objectives as well as key performance indicators (KPIs)

Enable Raiz to increase its market share by 25% in the target segment including the low budget young group

Reduce the churn rate by 4% for the first quarter of operations

Raise the customer loyalty rate by 10% by converting current passives to promoters

Time-Scheduled Roadmap

For cross-selling and retention strategies for the low budget young segment, the following time schedule is recommended for Raiz to apply.

Phase Activity Timeframe

Phase 1 Bundling products in an attractive package In the next 12 months

Review and update of bundled products every 2 months

Phase 2 Promoting products that other people bought

Recommending related items Continuously for the next 12 months

Phase 3 Offering discounts on bundled products For the next 12 months

Weekly reviews

Phase 4 Promoting products that are essential to another product’s performance For the next 12 months. Review every month based on uniquely bundled products and highest moving products

Phase 5 Excellent customer service

Fast support

Personalized interactions

Meeting customers where they are

Incentivizing loyalty Continuous for the next 12 months

Phase 6 Surprise gifts Every week

Key Performance Indicators

The metrics for the low budget young segment is as follows

Cross-Selling Metrics

KPI Composition Sources Frequency

Sales effort spent Amount of time spent on the right products by sales representatives Time logged on phone calls and customer engagement Weekly

Activities per opportunity New pipeline generated efficiency Amount of time used to make interactions leading to new business Weekly

Win rate New business generated out of each cross-sell strategy Conversion rates leading to business Monthly

Attach rate Accurate forecasting of cross-sell and net new more accurately Higher numbers per period Quarterly

Renewal rate Selling products with a long term value Amount of repeat business per period Annually

Retention Metrics

KPI Composition Sources Frequency

Customer retention rate Calculated through getting number of customers at end of time period minus the number of new customers acquired during time period (divided by number of customers at the beginning of a time period) New customer entries Monthly

Churn rate The percentage of lost customers over a given time period Customer accounts Monthly

Existing customer revenue growth ratio Revenue generated from customer success, retentions, and loyalty effort Higher numbers of monthly revenue from retention efforts Monthly

Net incremental revenue Changes in net revenue earned Higher numbers per period Quarterly

Repeat purchase rate Percentage of customers returning to make repeat purchases Amount of repeat business per period Monthly

References

Biswas, S. (2014). Relationship marketing: concepts, theories and cases. PHI Learning Pvt. Ltd..Ghoshal, A., Mookerjee, V. S., & Sarkar, S. (2021). Recommendations and Cross-selling: Pricing Strategies when Personalizing Firms Cross-sell. Journal of Management Information Systems, 38(2), 430-456.

Gomber, P., Kauffman, R. J., Parker, C., & Weber, B. W. (2018). On the fintech revolution: Interpreting the forces of innovation, disruption, and transformation in financial services. Journal of management information systems, 35(1), 220-265.

Jayalath, J. A. R. C., & Premaratne, S. C. (2021). Analysis of Key Digital Technology Infrastructure and Cyber Security Consideration Factors for Fintech Companies. Analysis of Key Digital Technology Infrastructure and Cyber Security Consideration Factors for Fintech Companies, 84(1), 8-8.

Mahmoud, M. A., Hinson, R. E., & Adika, M. K. (2018). The effect of trust, commitment, and conflict handling on customer retention: the mediating role of customer satisfaction. Journal of Relationship Marketing, 17(4), 257-276.

Renjith, S. (2017). B2C E-Commerce customer churn management: Churn detection using support vector machine and personalized retention using hybrid recommendations. International Journal on Future Revolution in Computer Science & Communication Engineering, 3(11), 34-39.