High Tech

A Leading US Streaming Service revolutionizes customer retention with AI-Powered churn prediction

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Engagement Background

The media streaming service faced significant challenges in customer retention and operational efficiency. Existing retention strategies lacked the accuracy needed to predict customer churn effectively, resulting in increased attrition rates and higher acquisition costs. In addition, limited data analysis tools hindered the development of robust predictive models capable of addressing the complex behaviors of a large subscriber base.

Apexon embarked on a strategic partnership to overhaul these challenges. The initiative aimed to deploy advanced AI and machine learning solutions to enhance predictive accuracy and optimize retention campaigns. By integrating sophisticated data analytics frameworks and leveraging cloud-based infrastructure, Apexon sought to empower proactive churn management and personalized customer retention strategies.

About the client

This company is an Emmy® Award-winning live streaming TV service offering a diverse range of channels across general, Latino, and international markets. It delivers content via major streaming platforms, smart TVs, tablets, game consoles, computers, and smartphones. With flexible streaming packages that include à la carte channels, Pay-Per-View events, and on-demand movies, the company caters to a wide audience with varied viewing preferences.

Leading in foreign-language programming, this company provides over 300 channels in more than 20 languages. Through its innovative technical platforms, it simplifies over-the-air (OTA) entertainment solutions, enhancing the viewing experience for its users. As a wholly owned subsidiary of a prominent multi-billion-dollar network corporation, this company continues to innovate in the streaming TV industry.

The Challenge

Reimagining Customer Retention with Limited Data and Inaccurate Predictions 

Our client, a leading media streaming service, sought to enhance their customer retention strategy through advanced predictive and prescriptive analytics. They aimed to leverage AI models and fine-tuned business casing for targeted retention cohorts. However, they faced significant challenges with their existing retention strategies, which were ineffective, lacked actionable insights, and suffered from a dearth of effective data analysis tools, hindering their ability to retain subscribers and achieve sustainable growth.

Key Challenges:

Low Prediction Accuracy
Low Prediction Accuracy

Current churn prediction models suffered from poor accuracy, failing to effectively identify at-risk customers due to the limited predictive data used for model development. 

Data Analysis Tool Deficiency
Data Analysis Tool Deficiency

The lack of robust data analysis tools significantly hampered advanced model training and development. Extracting meaningful insights from complex customer behavior data across a large subscriber base was hindered by inadequate tools.

Ineffective Retention Strategies
Ineffective Retention Strategies

Due to the underperformance of existing models, previous retention campaigns lacked actionable insights and struggled to generate positive business cases. Without reliable prediction and insufficient data analysis capabilities, profitable retention initiatives were difficult to implement.

Lack of Proactive Churn Management
Lack of Proactive Churn Management

Without a proactive churn management strategy, the company was reactive in retaining customers and missed opportunities for prevention.

Escalating Customer Acquisition Costs
Escalating Customer Acquisition Costs

The increasing costs of acquiring new customers made it imperative to focus on retaining existing subscribers to ensure sustainable growth.

The Solution

Empowering Retention with Advanced AI and Machine Learning Driven Churn Prediction 

Apexon partnered with the media streaming service to revolutionize their customer retention strategies. Our comprehensive solution leveraged advanced AI-driven predictive and prescriptive analytics to address their churn challenges. The objective was to deploy sophisticated machine learning models and integrate advanced data analysis tools to significantly improve churn prediction accuracy and optimize retention campaigns. 

A Multi-Pronged Approach for Superior Churn Prediction
Advanced Machine Learning Model
Advanced Machine Learning Model

Through rigorous testing and comparison, Apexon identified the XGB Classifier as the highest-performing model, surpassing all contenders in churn prediction accuracy. This high-performing model allows the client to precisely target retention campaigns, maximizing their impact.

Enhanced Data Utilization 
Enhanced Data Utilization

Recognizing the importance of rich data, we significantly expanded the model’s data set by integrating over 100 additional variables based on user streaming behavior. This enriched data landscape empowered the XGB Classifier to achieve exceptional predictive power, significantly improving its ability to identify at-risk customers with remarkable precision.

Cloud Infrastructure 
Cloud Infrastructure

To ensure scalability and efficient data processing, we harnessed the power of the cloud. By leveraging Amazon SageMaker, EC2, S3, and other AWS technologies, we streamlined data processing, optimized data pipelines, and enhanced model deployment and management. This robust cloud infrastructure provided the foundation for a future-proof solution. 

Enhanced GT Creation Process
Predictive Analytics Framework

A comprehensive Predictive Analytics Framework was implemented to unlock the secrets hidden within vast amounts of streaming behavior and user interaction data. This framework provided real-time insights into customer behavior patterns, empowering the client to dynamically and effectively predict churn before it happens. 

Beyond Churn Prediction: A Holistic Approach

Apexon’s solution extended beyond churn prediction. We built an Advanced Data Analytics Platform to analyze ad inventory, content performance, customer viewing preferences, and subscription data. This platform provided deeper insights into customer experience, enabling the company to tailor their offerings and improve overall satisfaction. Additionally, we implemented Multi-Channel Integration with conversational AI to enhance customer service interactions across various channels. Finally, we employed a Structured ML Methodology encompassing discovery, development, ML Ops, and monitoring to ensure sustained model performance and long-term impact.

Key Results

Transformative Impact on Customer Retention through Advanced AI Solutions 

Apexon’s solution delivered remarkable improvements in customer retention for the media streaming service. Here’s a closer look at the quantifiable results:

Precise Churn Prediction with Minimal Errors
Precise Churn Prediction with Minimal Errors

91% Churn Prediction Accuracy Improved accuracy from 52% to 91% allows for precise identification of at-risk customers, enabling targeted interventions.

Low False Positive Rate (3-6%) Minimizes unnecessary retention costs and improves targeting efficiency.

Substantial Reduction in Churn
Substantial Reduction in Churn

Reduction in Customer Churn Rate Proactive retention strategies, driven by accurate predictions, effectively decrease churn.

Enhanced Personalization Leveraged accurate churn predictions to tailor retention offers, significantly boosting customer satisfaction and loyalty.

Enhanced Operational Efficiency and Cost Savings
Enhanced Operational Efficiency and Cost Savings

Optimized Retention Campaigns Reduced false positives and negatives ensure resources are effectively allocated towards genuine at-risk customers.

Streamlined Processes Integration of advanced AI models and cloud-based infrastructure facilitates seamless data processing and model deployment, enhancing overall operational efficiency.

Overall Business Value
Overall Business Value

Revolutionized Retention Strategy The significant improvement in prediction accuracy and targeted retention offers transformed the company’s retention approach, leading to sustainable growth.

Increased Customer Satisfaction Personalized and timely retention offers enhance customer experience, fostering long-term loyalty.

These key results showcase the powerful impact of Apexon’s AI-driven solution, highlighting substantial improvements in prediction accuracy, operational efficiency, and overall customer retention. The implementation of advanced machine learning models and comprehensive data analysis tools empowered the media streaming service to achieve exceptional business outcomes and maintain a competitive edge.