Calling time on dissatisfaction

Teradata has advice for telcos on churn prevention

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Calling time on dissatisfaction Schwarz: Mobile operators need to take a closer look at customer experience if they are to prevent churning.
By  Stefan Schwarz Published  December 4, 2012

Customer retention is a top priority concern for companies operating under today's fiercely competitive and difficult market conditions. More so in the saturated telecoms industry, in particular the pre-paid market where customer churn rates stand at around 40%.

Customers are always on the lookout for better deals and with an array of service providers to choose from, who can blame them. In an industry where it is cheaper to retain your existing customers than to acquire new ones, offering a simple integrated and intuitive customer experience is the key to success. While a better deal elsewhere is always going to disrupt the market, there is no escaping the link between customer experience and loyalty.

However loyalty can become severely tested when customers are faced with issues such as poor network service. A recent study conducted by Teradata with a market-leading, European mobile network operator, examined the relationship between network failures and customer churn. It showed an extremely high percentage of customers who experienced a network problem regularly over an extended period of time would move to another provider. Understandably, this trend was especially marked when failures occurred at the customer's home or office.

Through a better understanding of the customer's experience, telco operators can make a much stronger case to deal with such situations proactively. However currently, most telecoms companies rely solely on call detail records (CDRs) to do this. At the same time, network information gathered has been typically used by network operations for the purpose of network performance optimisation, capacity planning and rollouts. In reality carriers need to be using all available information to address issues around customer experience and churn. Active data warehousing helps them do just that, combining operational support system (OSS) and business support system (BSS) data to better serve and retain high-value customers.

By integrating network information into an enterprise data warehouse (EDW), organisations can get a single, integrated view of their business. This single view will enable better management of the customer's experience at all touch points from the edge of the network right through to customer care. Telcos need to collect, correlate and examine all network usage and signalling data at an individual customer and household level, including failed and disconnected calls, software and device issues. Only then will they be able to address customer dissatisfaction proactively before it reaches a crisis point.

For example, a customer who has poor network coverage at home may decide to use their landline; perhaps the first step to switching providers. By examining the network data for that customer, including dropped calls, unsuccessful call attempts, and bouncing between 3G down to 2G, they can identify and address the root cause of the problem. This may be easily solved by offering the customer a femtocell.  If the mobile operator has a good understanding of this customer's value, they can vary how much they charge for this on a sliding scale, perhaps providing it free for high-margin customers.

To sell femtocells, mobile operators first targeted whole areas where network coverage was poor. However, this approach was unsuccessful. Some people preferred to use their fixed line anyway; others lived on higher ground and found the coverage was good enough for what they needed.  There is a wide expectation gap between those who only use their mobile phone socially and occasionally, and business users who see a consistent service as mission-critical.  When network data is used to identify those most likely to need better coverage, the conversion rates for femtocells skyrocket.

Until recently, mobile operators were reluctant to invest in the technology infrastructure needed to deal with the high volumes of data they hold.  However, this view is changing as they begin to appreciate that offering a simple, integrated and intuitive customer experience is the key to succeed as a next-generation carrier and utilising such data will enable them to invest their funds most effectively. The evolving technology from WiMax 4G/LTE, VOIP and smart devices means it is now fundamental that operators understand their customer behaviours across all uses so they can stay ahead of the subscriber demands and deliver superior service. 

Active data warehousing will enable carriers to leverage the network experience data for better CEM. It focuses on the missing dimensions, providing insight on the customer experience related to device, location, the last-mile connection and new 3G services. The combination of data and powerful analytics at their fingertips can bring big benefits. Eventually, telecoms best practice will see insights gained from network data integrated with all customer data, including that from new less-structured sources, such as social media sites. When this is achieved, the industry will know when a customer is dissatisfied with a service before the situation reaches crisis point and they decide to move on to a competitor.

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