Reader Forum: Mobile subscriber data enables informed decisions

Editor’s Note: Welcome to our weekly Reader Forum section. In an attempt to broaden our interaction with our readers we have created this forum for those with something meaningful to say to the wireless industry. We want to keep this as open as possible, but maintain some editorial control so as to keep it free of commercials or attacks. Please send along submissions for this section to our editors at: dmeyer@ardenmediaco.com or tford@ardenmediaco.com.
Customer data provides valuable insight to help improve customer satisfaction and business performance. Up to now the mobile industry has struggled to always use this to its advantage, but today’s business intelligence tools can reduce churn and improve customer loyalty.
Intense competition, number portability and deregulation have given customers more choice than ever in the mobile market. According to figures from the analyst group Mediacells, more than 5,000 individual deals (different contract offerings with different phones and incentives) were available in just the U.K. alone. Many more may exist in the United States, and customer choice is eye watering.
We all know it costs less to keep customers than it does to acquire new ones, yet mobile remains an industry where churn rates can be as high as 25%. With the potential of losing one in four customers each year, the pressure on gaining new subscribers increases substantially. Given how easy it is to switch to another provider with little or no disruption in service, it is easy to understand why if a customer sees an appealing offer from another provider – or hears about something from a social influencer – they’ll change carriers to get what they want.
Churn itself is not however the most critical issue; churn of high value customers is. The real challenge is how to know which customers a network wants to retain and which it can afford to lose by creating a process through which intelligent choices can be made. In order to achieve this, mobile operators need to have a deep understanding of their customers’ behavior and influencers.
What is not always considered is the fact that the industry already has the information available to them to retain their best customers. Every call that someone makes and every text message they send, or receive, tells a story about the customer’s experience.
Consider, as an example, an area of poor mobile coverage in upstate New York. If customers receive a poor experience in the area, they blame the network. If it happens often enough, they may churn. All this information and more is readily available to the networks through call detail records.
The problem of course, is the vast quantity of call detail records that are created. Millions are created every hour, billions every week. Capturing, storing and analyzing that volume of information to gain meaningful data requires serious amounts of computer processing power. If there is not enough available, by the time the insight comes through it is out of date, resulting in unreliable reports and ultimately, wasted marketing dollars.
This is not just a problem for the mobile industry. Retail has faced the same challenges in a similar environment. Millions of purchases are made every hour, providing critical data on customer preferences and trends. For supermarkets this information not only provides the platform by which to deliver meaningful loyalty programs for customers but also to analyze trends in consumer behavior quickly and ensure that the shelves are stocked appropriately. Supermarkets are now looking to store and analyze years’ worth of information and use it to mange inventory, increase sales and reduce waste. Simply put, it enables them to accurately predict how many bags of potato chips to stock on a snowy Super Bowl Sunday.
While the example is a simple one, the impact on a business can be immense. Imagine the benefit to a mobile operator call center or to a retail store to be able to analyze instantly not only the value of a customer in terms of their revenues, but where they use their phone, the problems they may have encountered with network coverage and their overall value as a customer – and all from real customer data rather than models or assumptions. Offering them a contract that is not only better value for them but also delivers additional benefit for the network or retailer also then becomes a reality. The whole relationship with an unhappy customer could be transformed by simply informing them that the network coverage problems they had encountered in upstate New York recently were being pro-actively addressed.
The technology that enables a business to take advantage of their customer data is already available, and leading mobile companies such as Virgin are performing data mining and analysis with excellent results. They are experiencing cost savings and improved customer relationships by simply using customer’s call detail records to provide more accurate billing, enhance network coverage and drive customer loyalty.
Customers tell us everything we need to know about our business. The challenge for mobile in the past has been to deliver meaningful insight from the vast volume of information available. Now that this issue has been overcome, the question is not how but when to use critical customer information to increase loyalty and reduce churn. The capability is already there. The potential is yet to be fully exploited.
John Gillespie serves as Netezza’s VP and GM for its global telecommunications business. Gillespie brings over 20 years of experience delivering complex leading edge solutions to the global telecommunications marketplace. Prior to Netezza, John served as VP of global sales and corporate development for NexTone Communications, where he grew its customer base from zero to over 500 of the largest global network operators. Prior to NexTone, John managed North America sales for nCUBE, a leading provider of video server solutions for cable and telecommunications. John has also held various other management roles consulting to the telecommunications industry.