Data Warehousing: A Telecom Company Reduces Churn by Leveraging Information
Business Challenge
With one simple phone call, consumers can switch their long distance service provider. Commodity businesses, especially telecoms and utilities, are forced to manage the inevitable price sensitive, deal-prone customer. The Director of Marketing at a large telecom needed answers to two simple questions, "What types of customers are switching away from our service?" and "What is the financial cost of churn to our business?"Solution: Web-Based Campaign Management
Armeta´s technical team determined that data was available to both characterize switch-prone customers and to quantify the associated churn costs. However, the data resided in three disparate systems, all with uncommon formats.To ensure the company could continue to monitor and analyze churn rates, the team established the framework for a data mart. With a framework in place, the team rolled up their sleeves and began scrubbing through millions of EDI switch transactions to understand quantity, frequency and timing of switches. The switch data was then matched to customer data from the CRM system to reveal these customers’ potential lifetime value, tenure and past contact via campaigns and customer care. The information to answer the Director’s question was now available, but Armeta did not stop their efforts there. Rather, third party demographic data was cleansed, coded and matched to the customer and switch data to allow the company to proactively identify customers who may be at-risk of switching based on similar demographic and behavioral characteristics of those who already switched service.
Result
Armeta built prospect and customer data marts of both residential (over 150 million names) and business-to-business (11.5 million names) segments. These data marts consisted of collected information from internal systems overlaid with outside third part data to provide a single snapshot of each customer and prospect with unlimited querying and reporting capabilities. To minimize future churn, an outbound call campaign was initiated targeting customers determined to potentially switch. By capitalizing on the information available in the data mart and initiating strategic marketing campaigns, this telecom division was able to reduce churn significantly.
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