Churn Management in

Mobile CommunicationsLed by

Dr. E. Xevelonakis

Definitions

ChurnTerm used to describe customer attrition or loss

Churn rateThe number of participants who discontinue their use of a service divided by the average number of total participants during a period

SunTel Mobile Telecommunications Slide 2/19

Growth rates worldwide

SunTel Mobile Telecommunications Slide 3/19

Reasons for churn

Easy to switch providerDifficult to manage the customer data Inadequate servicesQuality of servicePlenty of attractive offersCustomer dissatisfaction

SunTel Mobile Telecommunications Slide 4/19

Types of churn

InvoluntaryInternalVoluntary

Need to focus

SunTel Mobile Telecommunications Slide 5/19

Data Transformation

Data identificationData collectionValidation & CleaningTranspose to right granularityAddition of derived variablesPreparation of Model SetConduct Modelling

SunTel Mobile Telecommunications Slide 6/19

Propensity to Churn

Changes in spending or payment patterns

Recurrent or multiple problems or queries

SunTel Mobile Telecommunications Slide 7/19

Customer profitability calculation

completed callscall forwardingfailed callscustomer care callsvoice callsdirectory infodata calls

SunTel Mobile Telecommunications Slide 8/19

Churn reduction

Identify customer’s valuePlan a profitable marketing strategyPoint out clients most likely to defectDevelop win-back policy for worthwhile customers

SunTel Mobile Telecommunications Slide 9/19

Data Set & Variables (1/2)

Race / OriginCurrent AgeOccupationGeographic Locale or Major CityNumber of households at addressLength of serviceLifetime average minutes usage

SunTel Mobile Telecommunications Slide 10/19

Data Set & Variables (2/2)

Average monthly calls (lifetime)Average monthly minutes (completed voice)Recent change in monthly minutes Days since last retention callRange of monthly recurring chargesHandset price

SunTel Mobile Telecommunications Slide 11/19

Decision Trees or Neural Networks?

Decision treescustomer classificationeasier to use

Neural networkshidden pattern recognitionless costlymore advanced

Decision Trees

Neural Networks

SunTel Mobile Telecommunications Slide 12/19

Premium customers

CharacteristicsLong duration / high cost callsDemand high quality of service

Churn due to network incapability / high costStrategy

Free talking time Gift mobile devices

SunTel Mobile Telecommunications Slide 13/19

Classic customers

CharacteristicsExcessive SMS usageShort duration of callsUnstable user group

Churn due to competitors’ better offersStrategy

Special prepaid cardsSMS offersDiscounts in new handsets

SunTel Mobile Telecommunications Slide 14/19

Strategy

Keep both groupsClassic customers represent clients’ majorityPremium customers have

high customer value

Design different market models for each group

SunTel Mobile Telecommunications Slide 15/19

Past, present, future

SunTel Mobile Telecommunications Slide 16/19

Latency effect

Need for immediate actionUndesired rise in churn ratesMore dissatisfied customers

SunTel Mobile Telecommunications Slide 17/19

Telecommunications in Greece

1/1/1996 Deregulation4 major companies 3rd place worldwide in handset possession11,8 million connectionsLow usageElastic market13% of the market comes from data transmission

SunTel Mobile Telecommunications Slide 18/19

Greek market strategies

Incentives to use new technologiesSpecial economic programsDiscounts in handsetsBilling discountsAdvertisement

SunTel Mobile Telecommunications Slide 19/19

The End…

Thank you for attending our lecture!