Case Study: Customer Retention Strategy Lowers Telecom Customer Churn

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  • 1. Case study: Customer Retention Strategy Lowers Telecom Customer Churn by 50 Percent Proactive strategies lead to lower churn, higher renewal rates, and ways to adapt to changing market and customer dynamics COPYRIGHT © 2014. ALL RIGHTS PROTECTED AND RESERVED.
  • 2. The Challenge: Proactively retain customers and improve save rates in reactive actions With new entrants in the telecommunications market disrupting the status quo, one Middle Eastern telecom incumbent faced a sharp increase in customer churn rates, resulting in eroding market share and revenues. With a mobile market penetration of over 150 percent, high dual-SIM ownership after the entry of the competitor, and further deregulation on the horizon, the incumbent needed ways to retain valuable churn-risky customers and activate dormant lines. Peppers & Rogers Group helped the client design and implement proactive retention capabilities and revamp the reactive retention domain. 2
  • 3. The Approach: Create churn prediction models and design relevant offers The Peppers & Rogers Group team began by building a churn prediction model, designing offers, and deploying the outbound retention team. Specifically, the team: •Analyzed the reasons for churn and validated churn hypothesis with data analysis and surveys •Using this insight, developed and implemented churn prediction analytics model with a very high accuracy that periodically updates the risk scores for more accurate and timely retention actions •Developed a pool of retention offers for different churn reasons and customer behavior for higher relevancy thus retention performance •Tested the performance of these retention offers and optimized them based on the pilot results •Established process for internal alignment within marketing for fast and coordinated campaign deployment •Deployed outbound retention team in the contact center and helped roll-out the initial proactive retention actions 3
  • 4. The Approach: Create churn prediction models and design relevant offers Because the operator suffered from low save rates for reactive retention actions, the team also uplifted reactive retention performance. Specifically, the team designed and deployed dedicated ‘save desks’ at retail outlets, established a dedicated inbound retention team for value added services, and deployed standardized processes and tools to support the ‘Save Desks’ in outlets and the retention team at the contact center. While deploying these capabilities, the team focused on complete knowledge transfer to build the internal capabilities within the operator for a sustainable and longterm solution. Currently, the operator is able to run the retention activities as per the plan and re-evaluate the requirements as market dynamics change. 4
  • 5. Insights & Outcomes: Churn Decreases by 50 Percent, Renewal Increases by 15 Percent Despite the increasing competitive pressure, the proactive retention capabilities helped by Peppers & Rogers Group achieve 50 percent decrease in prepaid and postpaid blended churn rate. In addition, the company saw a 15 percent increase in renewal rates within the first year of implementation. Similarly, the revamp of the reactive retention tripled the save rates. With this project, the operator developed a sustainable retention capability that has a direct bottom line impact on company performance. 5
  • 6. www.peppersandrogersgroup.com www.teletech.com Corporate Headquarters: 9790 South Peoria St Englewood, CT 80112 USA +1 (203) 989-2200 COPYRIGHT © 2014. ALL RIGHTS PROTECTED AND RESERVED. The information contained in this document, much of which is confidential to Peppers & Rogers Group, is for the sole use of the intended recipients. No part of this document may be reproduced in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Peppers & Rogers Group. Peppers & Rogers Group is a division of TeleTech.