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For telcos, social network analytics key to retaining customers
Delaney Turner 270002T14M email@example.com | | Tags:  business_intelligence ibmsoftware predictive_analytics spss telco telecommunications cognos
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In this week's feature article, we look at how for telcos, social networks can act as a new source of insights into customer behavior and sentiment, and how they can use business analytics to leverage these insights into lower customer churn rates.
Maintaining subscriber relationships and increasing average revenue per user (ARPU) rates are major challenges facing carriers and cable operators, and gaining greater insight into social network analytics is key to creating longer-lasting customer relationships.
Predictive analytics and business intelligence (BI) allow telecommunications service providers (telcos) to align their processes around a common view of their most influential customers. Executive-level real-time dashboards, a proven data collection system, state-of-the-art parallel and online algorithms and end-to-end parallel processing can provide telcos with the real-time customer insights needed to minimize churn, improve operations and reduce costs.
Benefits in every department
Marketing, customer service, product management, operations and finance departments can analyze a wide range of historical and real-time customer information via planning and reporting tools that make meaningful information visually relevant. By leveraging IBM Cognos BI software and IBM SPSS predictive analytics software, service providers can more quickly:
Identifying influential subscribers
The Predictive Churn module within the IBM Real-Time Customer Insight Suite (RTCIS) leverages advanced social analytics to allow service providers to identify their most influential customers—and those of their competitors—and gain a competitive advantage by swiftly obtaining answers to the following questions:
Service providers can leverage BI, performance management and predictive analytics to identify likely churn candidates days or even weeks before they are likely to leave — so that high-value subscribers can be retained and nurtured.
Addressing social networks
Service providers typically think of their subscribers as individuals. However, they are also members of social networks consisting of friends, family members, colleagues and people who share common interests and shared mobility and behavioral patterns. A high proportion of their telephone calls will typically be within these interconnected groups.
Social network groups typically have a leader, recognizable by calling patterns and the degree to which they are connected to other group members — and these leaders are often highly influential. A leader of a social network who switches telecommunications carriers is likely to trigger similar defection within the group — and may even take the whole group with them. And all groups inevitably link to other groups, giving the potential for waves of defection to ripple throughout the subscriber base.
These patterns of influencers and the effects of their actions have redefined the way service providers calculate the relative value of customers. Social network analysis allows service providers to identify groups and leaders from call detail records (CDRs) so they can detect churn candidates in real time — even before the CDRs are deposited into the data warehouse.
Retaining high-value subscribers
In today’s highly volatile and competitive market, subscribers can switch telecommunications service providers and cable providers with greater ease and speed than ever before. Keeping high-value subscribers loyal is central to business success and growth.
Predictive analytics has proven its worth for many as a technique for identifying likely churn candidates and targeting retention efforts. This approach leverages a wide range of customer data, but has traditionally lacked the ability to utilize real-time information to provide access to immediate indicators of potential subscriber churn.
When predictive analytics is combined with business intelligence and social network analysis, telcos and cable operators gain the ability to better prioritize their retention efforts toward influential subscribers. The risk level assigned is linked to the risk of losing the whole group of subscribers influenced by the identified leaders of a social network.
Identifying these groups and their leaders—and recognizing in real-time when they are an immediate churn risk—complements and adds value to traditional predictive approaches and enables service providers to take timely action to retain the subscribers who are truly most valuable — in terms of the revenue they influence. This insight — combined with the right offer at the right time — can lead to exponential gains in the effectiveness of churn management strategies.
Turning insights into action
Identifying churn candidates means nothing — unless you can take effective action to retain them. RTCIS includes a recommendation engine that suggests the most appropriate treatment given the individual’s past activities correlated to the behavior of similar subscribers. It also provides retention teams and marketers with insights into customer propensities and product preferences, and an understanding of how particular offers or marketing campaigns are received and how effective they are for particular customer profiles. This allows telcos to combine the best human expertise with powerful predictive models to ensure the offers made have the best chance of ensuring retention.
All photos courtesy of Wikimedia Commons