Project 3: Voice of the Customer
Project 3: Voice of the Customer
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Scenario
Scenario
Prism Beauty is a makeup company that offers membership-based services. Leadership noticed that memberships have decreased steadily over the last three business quarters and they want to learn if this decrease is due to internal factors, like customer satisfaction, or external factors, like inflation. Our task was to assess the drivers contributing to membership churn.
Exit Survey
Exit Survey
We first proposed a short, targeted exit survey that appears just before a customer completes their membership cancellation. This ensures that feedback is relevant, recent, and insightful.
Survey Questions
What is the primary reason you are canceling your Prism Beauty membership? (Single Choice)
What would have made you stay? (Multiple Choice)
How satisfied were you with your Prism Beauty experience? (1 to 5-star rating)
Would you consider rejoining in the future? (Single Choice)
Do you have any additional feedback for us? (Optional Open Text)
KEY TAKEAWAYS
KEY TAKEAWAYS
Perceived value is low: 42% of members canceled their Prism Beauty membership because they felt they were not getting enough value
Opportunity to reclaim lost members: 52% of members stated that they would consider rejoining Prism Beauty in the future if changes are made to memberships
A/B Test
A/B Test
Goal: Measure whether offering a bonus product reduces membership cancellations.
Hypothesis: If members receive a bonus product, they will feel they’re getting more value and will be less likely to cancel their membership.
Methodology: Run the test for 3 billing cycles. Randomly assign existing members into Control and Test groups. Ensure similar distribution by tenure, engagement level, and demographics across both groups. Given our current total membership base of 8,000 members with a monthly churn rate of 15%, we want to test a reduction in churn to 10%. We will need 681 members per group (~17% of our total membership base).
Group A (Control): Receives the standard membership with no bonus product.
Group B (Test): Receives a bonus product (e.g., mini lipstick, skincare sample, etc.).
RESULTS
RESULTS
On the average the group with perk/bonus introduction (mean cancellations rate= 10.94, sd = 2.22) has lower membership cancellation rate than the group with no bonus/perks (mean cancellation rate = 15.03, sd = 1.1).
More detailed test results can be found here.
⭐ In conclusion, we recommend adding a bonus product to reduce membership cancellation.
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