Challenge

• William Hill’s marketing team was challenged with onboarding customers with higher lifetime value – a focus on quality of customers rather than volume. This would significantly decrease risk of high welcome bonuses for low value customers.

• The team was also challenged to be more efficient and effective with their acquisition spend.

• The goals were to decrease the CPA by at least 15% and increase the ROI from acquisition spend per customer by at least 20%.

Task

• We were tasked with creating a Customer Lifetime Value model to predict the value of customers being onboarded from each acquisition channel and campaign.

• Analysing each acquisition campaign.

• Optimizing acquisition budget allocation between each acquisition channel.

Approach

• Defining success: the key KPIs used to measure success were average lifetime value of customers being onboarded pre and post strategy implementation, ROI from acquisition campaigns pre and post strategy implementation, and churn rate of newly acquired customers pre and post strategy implementation.

• Creating the correct links: source data from each of the acquisition channels needed to be fed to the backend database and formatted in the appropriate manner to allow for data analysis and data scientific modelling.

• Projecting lifetime value: we used an AI-powered machine learning model to project lifetime value of customers split by each acquisition channel. This allowed the team to determine which acquisition channel was generating the most valuable customers.

• Optimizing bidding strategy: Using the value generated from each channel, the appropriate bidding strategy was assigned to each acquisition campaign.

• Analysing and optimizing each campaign: each campaign was analysed to ensure correct audience, correct day/week/month of send, and optimal use of content/design.

• Identifying High Value Customers (HVC): the lifetime value model enabled early detection of potentially High Value Customers – this was extremely powerful in strategy building and decision-making for the entire marketing department.

Results

• The acquisition strategy shift from quantity to quality proved a success. The average lifetime value of customers being onboarded increased by over 31% post strategy implementation.

• The CPA decreased by approximately 18% and the ROI from acquisition spend per customer increased by 45%.

• Churn rate of newly acquired customers month one to two dropped by 40%.

• The projected lifetime value model was also used by the CRM team in re-building the customer welcome journey and in implementing a more specialised communication strategy.