Case Study: Midwest Wireless

“This success has also prompted us to expand the use of Cohorts data for promoting national and regional coverage plans in new customer prospect mailings to improve response and sales in these areas as well.”

- Marcia Bahr, vice president of marketing and communications, Midwest Wireless

 

Midwest Wireless had one of the highest customer loyalty rates in the industry. The company turned to Cohorts for help with segmentation of its subscriber database, with the goal of improving response rates to its direct mail campaign.

The Situation
Midwest Wireless offers wireless phone services, mobile wireless Internet and oneWave™ broadband phone service for its 450,000 customers and the people living in its 85-county service area in Minnesota, Wisconsin and Iowa. Midwest Wireless turned to Cohorts for help with segmentation of its subscriber database, so that the company could mail versioned retention messages to customers who are within 30 days of contract expiration, with the goal of improving response rates to its direct mail campaign.

The Objectives

  • Identify and analyze Cohorts segments within Midwest Wireless’ current subscriber list
  • Combine appropriate Cohorts segments into unique Midwest Wireless mega-segments based on index scores for a range of key variables
  • Target those subscribers for a versioned, customer-retention direct mail campaign that’s based on the needs and attributes unique to each mega-segment

The Solution
Cohorts enabled Midwest Wireless to identify and group subscribers within several mega-segments for direct mail purposes. The segments were defined by index scores for service plan, number of lines per account, monthly income by line, family status and level of “tech-savvyness.” A look at the distribution of Cohorts segments within the database showed the overall makeup of the current subscriber base and revealed the segments with the greatest affinity for certain wireless telephone services.

With services from advertising agency Flynn Wright (based in Des Moines, Iowa), Midwest Wireless utilized Cohorts market research data and analysis to develop five different direct mail pieces targeting the mega-segments with different service features deemed most relevant to each segment, based on likelihood of using specific plan features and services. Each piece was versioned with text and imagery that would appeal to a particular mega-segment based on the deeper understanding enabled by Cohorts, and utilizing the company’s core messages of value and coverage areas.

The Results
When compared with Midwest Wireless’ historical contract renewal campaign results, the Cohorts-based personalization of retention mailings to mega-segments delivered much higher response rates, based on activations.

  • Activations increased between 111 percent and 132 percent since the versioning began
  • Deactivations decreased between 42 percent and 84 percent since the versioning began
  • All versioned mailers responded at higher rates than previous non-versioned mailings
  • The five direct mail pieces realized an average response rate of between 16 percent and 19 percent
  • Higher-than-average returns more than offset the nominal increase in costs for creating versioned mailers
  • Mailing costs per renewal decreased by up to 41 percent
  • New lines were added to existing accounts at a greatly reduced cost
  • Employees throughout Midwest Wireless—from sales and marketing to agents and database management/IT—began using Cohorts vernacular and mega-segment references, allowing for more meaningful subscriber discussions and strategic-planning events

Midwest Wireless’ success at personalized, Cohorts-based customer communications has made Cohorts segmentation a staple in the company’s approach to direct marketing for subscriber retention.