The Client
Leading European omnichannel retailer of consumer electronics and technology products operating across 6 countries, selling extended warranty subscriptions as add-on service contracts.
The Challenge
Fluctuating claims made profitability impossible to predict
Great variation in warranty subscription profitability due to fluctuating claim levels made it impossible to set optimal pricing or understand customer lifetime value.
Previous analyses lacked granularity, resulting in inaccurate forecasting and missed revenue opportunities.
What We Did
Lifetime value analytics with cohort segmentation
- Analysed transactional data across all channels and territories
- Implemented probabilistic bottom-up aggregation model with customer cohort segmentation
- Segmented data across 25+ value dimensions including product category, channel and warranty type
- Built predictive models for claims propensities and lifetime customer value
- Deployed real-time Power BI dashboards for comprehensive performance insights
The Impact
New pricing opportunities with true channel profitability
45%
Forecasting accuracy improvement
85%
Revenue in top 14 products
1%
Year-on-year margin increase
Improved forecasting accuracy by 45% whilst revealing revenue concentration and identifying one consistently loss-making channel. Exposed new pricing opportunities with margin differentials reflecting true channel profitability.
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