02
Aug
08

Gearing-up for Mobile Number Portability(MNP)

In India, yesterday the Government has announced the deadline & a roadmap for Mobile Number Portability ( MNP). Cequity believes this is going to be an important challenge for telecom operators in India and there is a need for huge customer retention & targeted marketing efforts in gearing-up to this environment, as this is just a few months away.

Here’s is how South African Mobile operators have approached this challenge:

The introduction of Mobile Number Portability (MNP) enabled South African mobile phone service customers to retain their phone number when changing mobile service provider, this was expected to test customer loyalty and trigger far higher levels of churn, as it did in other countries that have already introduced number portability. Analysts believed that more than one-quarter of consumers (a predicted 27%) will change networks within one year of the service becoming available, and such predictions have ensured that customer retention is now firmly at the top of the agenda for the country’s mobile operators.

What drives churn?
Although particularly rife in fiercely competitive industries such as telecoms, customer churn is a significant problem that spares very few companies. The mobile communications industry in particular is largely product driven and price conscious – two traditionally strong reasons for runaway customer churn. But Moodley suggests that the main driver of churn may actually be service delivery, both in terms of customer service and network performance.

“Although it might appear otherwise, with price conscious customers clamouring for the latest and greatest handsets, these reasons tend to cancel themselves out in the age of hyper-consumerism,” said Moodley. “And products and service packages are quickly replicated by the competition anyway, so there is no real, enduring advantage from either.”

“The higher rates of churn will predominantly be from customers with existing complaints or reasons for wanting to move, simply taking advantage of MNP.”

Predictive modelling techniques based on empirical evidence and analytics can help find churn patterns. By combining a variety of mathematical techniques, including artificial neural networks, statistical regression, and decision trees, many SA mobile operators determine the propensity of any individual customer to cease doing business with a company within a given time period.

The results are often surprising: “You might be under the impression that customers want the latest phones or trendier outlets, but – for example – a large number of those leaving the network may have experienced a considerable number of dropped calls in the past six months.”

Analytical customer management strategies can certainly be helpful for mobile phone network operators because they have unusually rich transactional data, which allows very specific patterns and results to be identified.

Cequity View Point: Collaborative & iterative approach is the need of the hour

Continuous, easy & quick analysis will be very useful and to maximize the efforts of marketing, customer service, and other departments, data analysis has to work in a synergistic manner. Analytical insights must be effectively used by marketers to have an interactive “dialog” with their transactional data–and also allow a cross-functional team to review the latest data and create meaningful interactions with customers that are most at risk at any given time.

Better access to and understanding of customer data will help circle heads take informed decisions and help build better customer relationships. Faster cycle times can accelerate deeper understanding and improve time-to-market–both will be key to success in an increasingly competitive marketplace like India.

The key to effectively combating number portability related churn is a flexible and iterative approach.

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At Cequity, we believe customer intelligence will be the biggest competitive advantage enterprises will have in the next decade or two. Successful enterprises of tomorrow will be the ones who can organize and leverage this information at speed to optimize their marketing performance, increase accountability, improve profit and deliver growth. Cequity insights will bring to you trends and insights in this area and it’s our way of sharing best practices so as to help you accelerate this culture and thinking in your organization.
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