For coworking spaces being able to proactively retain existing customers is a vital market advantage as it can costs five to seven times as much to win a new customer as keep an existing one.
Seeable AI is a game changer for coworking space operators; it can assess churn probability, sound an early warning alarm and encourage a coworking space operator to take preemptive action.
What are the prerequisites?
Seeable‘s optimisation engine works with your coworking space historical data. Depending on the nature of coworking space membership plans you have on sale, it may need as little as 3 last months of data (with up to 1 year, if you sign a lot of longer multi-month contracts).
The most beneficial way to use our algorithms is to leverage them as part of the Seeable platform.
However, if you’re currently using other coworking software and not getting the insights you need to run your business effectively, no problem at all – our software integrates well with the most popular ones on the market.
What’s the outcome?
- List of your active customers with churn probability assigned to each name (if you use Seeable platform, the list is updated in real-time and notifications get sent whenever customer’s churn probability gets dangerously high)
- List of positive / negative churn predictors. We consider dozens of possible factors, including, but not limited to:
- membership plan
- number of invoices (paid and due)
- number of meeting rooms booked and all sorts of booking patterns (time of day, room location, meeting type etc)
- number of check-ins and behavioural patterns
- customer demographics
What kind of insights to improve your coworking space can you derive?
Let’s say you sell many membership plans, including in particular:
- Community (event participation only): $95 / month
- Flexible – 5 days (access to work at your space for maximum 5 days / month): $195 / month
- No-limit (24/7/365 access): $395 / month
On top of that, there’s two ways to pay for each plan:
- monthly (all contracts of this type auto-extend to the next month, unless cancelled by the customer)
- 6 month prepaid (every 6 months your job is to encourage customers to sign a contract extension with you)
Critically, to incentivise customers to choose 6 month prepaid option, you offer a 15% discount off the monthly price for all the plans.
Thanks to Seeable optimisation engine output, you can take a look at churn probabilities per membership plan.
It looks like, customers buying a 6 month prepaid version of all plans are more likely to churn.
Does it mean, you should stop offering them?
Not so fast! Let’s take a look at expected yearly revenue for the sample of a dozen of members per plan:
As it turns out, for all plans, but “Community” (for which results are very close to each other), considering churn probabilities, 6 month prepaid versions are expected to drive more revenue!
You should encourage your customers to purchase those!
There’s many ways to achieve that – the simplest you know already – price discounts.
You may ask if a 15% discount you currently offer is an optimal one.
In this particular case, it turns out for the “flexible” plan, an optimal strategy is to maintain a price difference between monthly and 6 month prepaid versions of the plan between 15% and 40%.
This type of math is done automatically for you, if you use Seeable platform. In fact, they’re presented to you as part of Opportunity Center, where you can implement changes with a single click (in this case, change plan prices), if you wish so.
Another sensible conclusion could be, your coworkers’ churn probability is objectively high (btw you can use Seeable platform to compare your results to other similar coworking spaces in the network). What actions could you undertake to fight churn?
“Stay” predictors as output by the optimisation engine, may come handy.
For our running example, they included:
- information rich member profile published in the member directory
- more than 25 office check ins every 6 months
- more than 10 invoices paid
- first ever plan choice being a 6 month prepaid version
Your task is now, to actively drive your customers to meeting the criteria, thus lowering the chance of them churning.
If you choose to use Seeable platform, Opportunity Center will help you achieve that, surfacing specific churn minimising actions (think: “help the newcomers fill in and publish their member profiles” or “the following coworkers have recently stopped visiting your space with a high enough frequency, re-invite them in or send a ‘Since you’ve been gone’ newsletter”)
Reach out so we can discuss available options. Usually, Seeable customers start from an on off historical data analysis based out of their current coworking software data. Valuing the importance of real-time updates and actions to drive improvement, they then typically migrate to Seeable platform.