For churn, try analytics, but with care

Written by on March 30, 2015 in Opinion with 0 Comments

drugsThere are many problems that face telecoms operators today. Network congestion, investment challenges, dissatisfied customers, but probably the one that continues to keep CEOs awake at night is churn.

Churn is proof-positive that if customers think that your service is bad enough they will jump ship. Loyalty, particularly from pre-paid customers is also at the mercy of cheaper service elsewhere. Last year, it was reported that churn was running at between one and two percent in the US last year. That may not sound like a big problem but take a carrier with over 40 million customers – well, you get the point.

To counter churn, operators have tried many approaches over the years. Having a network that does what the marketers say it can do should be a given and it goes a long way towards combating churn. The bundling of products and services certainly works by making the customer more ‘sticky’ – the theory being that is too much trouble to quit parts of the bundle.

Solving customer queries and complaints right the first time also works – screwing up, solving the problem, apologizing and being human also works remarkably better than it should. However, putting pushy salesmen into customer service and trying to sell deserting customers back into your world is probably the most offensive and least effective way of operating.

Now, though, after many, many presentations, conferences, papers, articles and discussions, it seems that analytics also works – in the field. Vodafone, the giant that posted revenues of around £40 billion last year has boosted its revenues by between one and two percent, ‘thanks to real-time anticipatory selling propelled by big data analytics.’

Although it is not clear just how much of Vodafone customer base is being addressed with analytics, it seems it is definitely using the technique to offer prepaid customers deals as their spending patterns change and balances drop below a certain point.

A survey conducted by the TM Forum last year that showed that the emphasis for real-time functionality is to help customers avoid bill shock, through balance management. The survey also showed that in two years’ time the emphasis would shift to supporting third party service providers through collaboration, dynamic pricing and innovations in areas such as zero-rating some apps. Vodafone, incidentally, was recently fined for offering zero-rated Facebook in the Netherlands, the only European country to have implemented net neutrality.

Bloomberg reported that similar technology used by telcos to determine if customers are about to churn may be used to determine when employees are about to quit and allow human resources to intervene in order to keep valuable staff.

VMware has been testing a new prediction technology from Workday that looks for trends within employee activity, when promotions were last handed out, regional factors, changes in the industry and other data to make its predictions.

Of course, the same predictive technology could be used to help uncover unhappy employees that the company may not wish to keep. They might be singled out for ‘special’ treatment or be ignored altogether.

Real-time analytics is clearly still in its infancy but what is encouraging is that a telecoms giant like Vodafone has put its money where its mouth is and is beginning to replace lost revenue by offering customers what they want, when they want it, and even before they might realize they want it. With that comes a range of ‘side-benefits’ as illustrated by VMware’s technology.

We may be at the crest of an analytics wave where solving one issue unexpectedly gives rise to solving another seemingly unrelated issue. Exciting times? Most definitely.

This article was first published on TelecomAsia.

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About the Author

About the Author: Tony is a freelance writer, regular speaker, MC and chairman for the telecoms and digital services industries worldwide. He has founded and managed software and services companies, acts a market strategist and is now Editor of DisruptiveViews. In June 2011, Tony was recognized as one of the 25 most influential people in telecom software worldwide. .

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