John Hoffman’s Model

[Managing Customer Churn]

By
SYNDICATE 4
ESHITA DEBBARMA(08020541076)
RAMESH BISHT(08020541)
UDAI BABU(08020541)
KAZI SHABIB(08020541)
ROHAN PATIL(08020541)
ANKUSH AGRAWAL(08020541)
Introducing Hoffman’s Model
 A brand must measure the percentage of
committed loyalists at any point of time.
 Having a large market share with a large
proportion of habitual loyalists will keep
the brand on a slippery wicket, as the
customers might switch on flimsy grounds.
 Hoffman recommends segregating
customers into different categories based
on their loyalty.
Hoffman’s Customer Segregation

[Line of commitment]

1 2 3 4
Committed Uncommitted Open Unavailable
regular regular users users
users
Applying Hoffman’s Model

On
Fast Moving Consumer Goods

COLGATE
TOOTHPASTE
Questionnaire

 1.) How satisfied are you with COLGATE

toothpaste, on a scale of 0 to 10?
 2.) How important is the decision to buy
COLGATE for you, on a scale of 0 to 10?
 3.) How attracted are you to the brands
competing with COLGATE, on a scale of 1
to 10?
Survey Results
a) Score: less than 0
Unavailable: 4
b) Score: 0 to 5
Open Users: 13
c) Score: 6 to 14
Uncommitted Regular Users: 27
d) Score: 15 to 20
Committed Regular Users: 6
Applying Hoffman’s Model

On
Service Sector

AIRTEL
Cellular Service Provider
Questionnaire

 1.) How satisfied are you with your

AIRTEL connection, on a scale of 0 to 10?
 2.) How important is the decision to buy
AIRTEL SIM card/recharge voucher for
you, on a scale of 0 to 10?
 3.) How attracted are you to the brands
competing with AIRTEL, on a scale of 1 to
10?
Survey Results
a) Score: less than 0
Unavailable: 5
b) Score: 0 to 5
Open Users: 14
c) Score: 6 to 14
Uncommitted Regular Users: 26
d) Score: 15 to 20
Committed Regular Users: 5
Managing Customer Churn
 Reassure and defend the committed regular
users.
 Identify and provide features that will instill
commitment in the uncommitted regular users’
category.
 Target the open users to make them regular
users with appropriate marketing strategies.
 Break the unavailable sector by identifying
points which make the unavailable users
unsatisfied with their brand.
Strategies [Churn Management]
 Colgate was viciously attacked by Pepsodent
with their 102% better germ fighter campaign.
 Colgate tried to maintain existing customers’
loyalties with the IDA [Indian Dental Association]
certification.
 Re-enforce the belief that Colgate dental cream
is the best in taking care of your teeth. Similarly,
the customers must believe that Airtel is the best
cellular service provider. This can be done by
appropriate marketing.
 Constantly innovate existing products and
continuously introduce new products.
Strategies [Churn Management]
 Bring out innovative products & services, reach out to
the customer, provide value for money and establish a
relationship with `brand differentiation
 Consider this: HUL’s Pepsodent complete germi-check
contains triclosan, a germ fighting chemical. Colgate-
Palmolive’s Colgate Total, which contains similar
chemical called Tricloguard, is priced at 31.11%
premium.
 Therefore, to target open users, who make buying
decisions usually on price:- Appropriate Pricing.
 Conduct nation-wide brand awareness and promotional
campaigns which involve celebrities from the glamour
world to target the unavailable users.