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Actian Blog / Reducing Customer Churn in the Telecom Industry with Connected Data

Reducing Customer Churn in the Telecom Industry with Connected Data

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Customer loyalty is the key to profitability in the telecom industry. Because telecom providers manage large fixed infrastructures that must be offset by revenue, customer churn (attrition) is particularly problematic in this industry.

Low switching costs for customers (supported by government regulations) mean that customer loyalty is the only real tool that telecom companies must reduce their churn rates.  Connected data, used to improve service quality, dynamically adjust pricing/promotions, and offer personalized content to consumers, enable telecom providers to influence customer loyalty and increase customer retention directly.

What Causes Customer Churn in the Telecom Industry?

There are four key factors that lead customers to change telecommunications providers.  Customer loyalty can be developed by companies directly addressing these factors.

  1. Service quality.
  2. Availability of features and content.
  3. Lower cost substitutes from competitors.
  4. Negative customer service experiences.

The good news for telecom companies is that all these factors are measurable and addressable.  If you can’t measure something, managing it is nearly impossible. Since these factors don’t fall in that group and are measurable, the challenge becomes turning massive amounts of raw data into actionable business insights and decisions that impact customer perceptions.

What Types of Data are Telecom Companies Connecting?

Telecom providers (both Communication Service Providers (CSPs) and content providers) have a unique opportunity to access rich customer data that isn’t available to many other industries.  This is due to the nature of their products/services and the visibility they have to the end-to-end supply chain of communication services.  They can see content and service usage through web services and centralized systems.  By accessing data from cell towers and deployed infrastructure, companies can add a location dimension to the data.  Reaching into individual consumer devices, these companies gain visibility to the last mile of the supply chain and can access data about the types of users/viewers of their services and telemetry on end-user service performance.

How are Telecom Companies using Connected Data to Reduce Customer Churn?

When you connect the different layers of data available in the field with company data about subscriptions, billing history, network utilization, and the cost of content, telecom companies have all the pieces to develop a genuinely comprehensive 360-degree view of individual customers.  The data about a single customer is interesting but may not be very actionable.  By analyzing the data of all customers (or using statistical sampling), telecom companies can identify trends, patterns, and conduct correlation analysis to understand what factors drive service usage behavior and influence customer satisfaction.  For example, they will be able to see what types of content are most popular with customers of a specific age or cultural demographic.  This can help the company acquire and provide content that increases customer engagement.  Aggregated trends against connected usage data are also used for infrastructure planning.

While individual usage may be highly variable, aggregated usage metrics can tell a company how much capacity is being used during different times during a typical week.  These insights can then be used to drive decisions that improve service quality and customer satisfaction.  Is there enough capacity in the network and content delivery services to support peak demand?  If the overall usage is trending upward, infrastructure upgrades may be needed.  If overall usage is trending downward, additional marketing efforts and/or service improvements may be necessary.  These insights can help a telecom company to address service quality and competitive pricing issues in broad strokes, but content/feature availability and customer service experiences require a more personal approach

Using Connected Data to Deliver Personalized Services

Telecommunications services are, to a great extent, commodities.  There are multiple cell phone carriers, internet service providers, streaming content providers, and voice services carriers available in most markets.  Differentiation between these companies in the eyes of customers comes from the availability of unique content and features as well as the quality of customer service experiences.  Telecom companies can use the connected data collected from customers and internal business processes to identify what services and content to recommend to end customers to personalize the service experience.

For example, service usage data for a family may indicate that during afternoon hours, teens and children are the primary consumers of services (after school).  During this time, streaming content offerings might be tailored to suggest kid-appropriate shows.  Usage data in the late morning may indicate an adult working from home and attending meetings using VoIP.  During this period, telecom companies might adjust QOS rules on the network to prioritize this type of traffic, so collaboration apps perform better.

Company performance and profitability are aggregate problems.  Customer loyalty is an individual problem that requires a personalized approach for each customer.  Connected data about customers can enable telecom companies to address both.  Actian can help with a full suite of data management solutions that enable telecom companies to connect all the pieces of customer data together, regardless of their source.  Processing and analysis can either take place in edge devices deployed in the network or centralized in the cloud using Avalanche – Actian’s connected data warehouse solution. With the data management tools from Actian, telecom companies can leverage more data, identify more actionable insights, and transform those insights into actions that directly address the causes of customer churn.

Actian’s solutions deliver the promise of real-time decision making by enabling a customer service agent to know the call they are on is with a customer who is a flight risk due to poor past service and reduced usage. They need to be armed with the latest retention offers to boost usage and improve their relationship with the carrier.

To learn more about solutions for the telecommunications industry, including customer stories and solution overviews, visit https://www.actian.com/solutions/by-industry/communications-media-entertainment/

About Pradeep Bhanot

Product Marketing professional, author, father and photographer. Born in Kenya. Lived in England through disco, punk and new romance eras. Moved to California just in time for grunge. Worked with Oracle databases at Oracle Corporation for 13 years. Database Administration for mainframe IBM DB2 and its predecessor SQL/DS at British Telecom and Watson Wyatt. Worked with IBM VSAM at CA Technologies and Serena Software. Microsoft SQL Server powered solutions from 1E and BDNA.