Predictive Analytics Create Serious Relationships for Telcos and Customers

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The recent Spotfire on-demand webcast, “Data Science 2.0: Guided and In-line Analytics with Spotfire,” covers how Spotfire and data science are impacting global business across every market and industry.

For example, if you work in the telecom industry this may mean using analytics to capture key knowledge of how well your network is satisfying customers and potential customers. This likely includes attrition and social churn analysis. Because of the wealth of customer data that telecommunications companies collect, they could easily evolve from becoming just “dumb pipe” providers to making a living “just out of analytics,” says Von McConnell, director of technology development and strategy at Sprint.

For example, location information about subscribers could help telcos provision their networks, McConnell notes. In addition, Sprint understands that it can forecast customer churn very well with analytics, he adds. And because consumers can be very finicky about the networks they use – and because it’s much more expensive for a company to go after new customers than service existing clients—telecom companies are in a fierce battle to reduce customer churn

Telecom companies are grappling with an increasing number of causes of customer churn including:

  • Price: Pricing promotions abound to entice customers to flee from one carrier to a competitor
  • Service quality: Lack of connection capabilities may make a customer go with a carrier with wider network coverage
  • Lack of customer service: Slow or no response to customer complaints makes a customer more likely to switch carriers
  • Billing disputes
  • New competitors entering the market
  • Competitors introducing new products or technology

Moreover, Accenture’s 2011 global consumer survey finds that churn is particularly high in the communications industry, and that consumers in emerging markets are more likely to switch brands than those in more developed markets. Mobile carriers are sitting on a treasure trove of information they can use to reduce churn. “Mobile carriers have vast resources of data, essentially everything that passes through their pipes,” the report notes. “Operators have an opportunity to dominate the ecosystem, but they must act quickly or lose out to aggressive competitors, whether they are familiar industry players or innovative companies from other industries.”

Telcos can tap predictive analytics to gain actionable insight about customers who may defect.

Accenture notes operators can:

  • Know immediately if a subscriber changes his SIM or swaps between multiple devices.
  • Know when subscribers access a competitor’s website.
  • Detect “hot spots” like current subscriber interests or reactions to competitors’ offers.
  • Plan quick responses to retain customers. “A European mobile operator identified a micro segment of ‘promotional churners’ by tracking a sudden surge of activity on a competitor’s website through mobile clickstream analysis,” Accenture notes. “The operator was able to immediately launch a counter promotion to successfully prevent churn.”
  • Use social media analytics to detect sentiment and reputation and identify key online influencers.
  • Identify customer segments and the types of promotions they might respond to based on historical behavior.

Explore Spotfire  today to learn more.