Tracking profitability by customer

You probably came across with a call centre agent who is trying to stop you from opting out from a service that you subscribed before. In most cases, they would offer you a package much cheaper than what you are currently paying. In some cases, they might even offer a custom package for you but sometimes they just don't do anything and say OK(like a quick good-bye) and unsubscribe you.

There can be two reasons for saying a quick OK to a customer about to leave;
1) The company does not have the ability to track its customers in customer level
2) The company has a system and the customer is not profitable at all thus better investing acquiring a new one rather then keeping the previous.

But there is only one chance if the agent coming to you with an attractive offer. The company has a customer level profitability solution.

Recently, I tried to opt out from Lovefilm when Netflix has been launched in the UK.The reason I wanted to change to Netflix was,  it was pure internet service without having to deal with DVDs in the posts. In addition, it was unlimited and same price with Lovefilm which was sending me 3 DVDs a month. The agent asked my reason to leave and I told him.

He waited for a moment and suddenly he changed to a robot(because it was obvious that he was reading from a script popped up on the screen) and after some bla bla sales talks he offered me the same package of Netflix for 1/5 price of it.(ie. Netflix was £5.99 a month and he offered £3.99 for three months) I accepted the offer because it was really cheap for the same service.(even though there are differences between Netflix and Lovefilm content archive) He quickly changed my package and activated my new package. Smoothly and quickly.

How could he do this? How did he give this decision to give me that package? Well, it is obvious that he is not making it up himself. The power lies behind the technology and process that Lovefilm has to track its customers. The system probably shows that I am not a heavy movie watcher and how profitable subscriber I am so offers the lowest it can get to prevent churn. If I was a home cinema freak, he might not offer the same price and package. Since he could see that I don't watch lots of movies in a month, instead of losing the customer, he almost gave away the service for free.

Now what happened? After three months I didn't watch lots of movies neither(even it was unlimited) and now I am switched to regular tariff which is back around £5 a month. If Lovefilm would have lost me, it would invest five times more than it did to acquire a new customer but power of customer level tracking provided Lovefilm to retain its customer.