Presentation Churn Management


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Presentation Churn Management

  1. 1. Churn Management inMobile Communications Led by Dr. E. Xevelonakis
  2. 2. Definitions Churn Term used to describe customer attrition or loss Churn rate The number of participants who discontinue their use of a service divided by the average number of total participants during a periodSunTel Mobile Telecommunications Slide 2/19
  3. 3. Growth rates worldwideSunTel Mobile Telecommunications Slide 3/19
  4. 4. Reasons for churn Easy to switch provider Difficult to manage the customer data Inadequate services Quality of service Plenty of attractive offers Customer dissatisfactionSunTel Mobile Telecommunications Slide 4/19
  5. 5. Types of churn Involuntary Internal Voluntary Need to focusSunTel Mobile Telecommunications Slide 5/19
  6. 6. Data Transformation Data identification Data collection Validation & Cleaning Transpose to right granularity Addition of derived variables Preparation of Model Set Conduct ModellingSunTel Mobile Telecommunications Slide 6/19
  7. 7. Propensity to Churn Changes in spending or payment patterns Recurrent or multiple problems or queriesSunTel Mobile Telecommunications Slide 7/19
  8. 8. Customer profitability calculation completed calls call forwarding failed calls customer care calls voice calls directory info data callsSunTel Mobile Telecommunications Slide 8/19
  9. 9. Churn reduction Identify customer’s value Plan a profitable marketing strategy Point out clients most likely to defect Develop win-back policy for worthwhile customersSunTel Mobile Telecommunications Slide 9/19
  10. 10. Data Set & Variables (1/2) Race / Origin Current Age Occupation Geographic Locale or Major City Number of households at address Length of service Lifetime average minutes usageSunTel Mobile Telecommunications Slide 10/19
  11. 11. Data Set & Variables (2/2) Average monthly calls (lifetime) Average monthly minutes (completed voice) Recent change in monthly minutes Days since last retention call Range of monthly recurring charges Handset priceSunTel Mobile Telecommunications Slide 11/19
  12. 12. Decision Trees or Neural Networks? Decision Trees Decision trees customer classification easier to use Neural Networks Neural networks hidden pattern recognition less costly more advancedSunTel Mobile Telecommunications Slide 12/19
  13. 13. Premium customers Characteristics Long duration / high cost calls Demand high quality of service Churn due to network incapability / high cost Strategy Free talking time Gift mobile devicesSunTel Mobile Telecommunications Slide 13/19
  14. 14. Classic customers Characteristics Excessive SMS usage Short duration of calls Unstable user group Churn due to competitors’ better offers Strategy Special prepaid cards SMS offers Discounts in new handsetsSunTel Mobile Telecommunications Slide 14/19
  15. 15. Strategy Keep both groups Classic customers represent clients’ majority Premium customers have high customer value Design different market models for each groupSunTel Mobile Telecommunications Slide 15/19
  16. 16. Past, present, futureSunTel Mobile Telecommunications Slide 16/19
  17. 17. Latency effect Need for immediate action Undesired rise in churn rates More dissatisfied customersSunTel Mobile Telecommunications Slide 17/19
  18. 18. Telecommunications in Greece 1/1/1996 Deregulation 4 major companies 3rd place worldwide in handset possession 11,8 million connections Low usage Elastic market 13% of the market comes from data transmissionSunTel Mobile Telecommunications Slide 18/19
  19. 19. Greek market strategies Incentives to use new technologies Special economic programs Discounts in handsets Billing discounts AdvertisementSunTel Mobile Telecommunications Slide 19/19
  20. 20. The End…Thank you for attending our lecture!