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Churn Management in Mobile Communications Led by Dr. E. Xevelonakis

Churn Management in Mobile Communications Led by Dr. E. Xevelonakis. 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 period.

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Churn Management in Mobile Communications Led by Dr. E. Xevelonakis

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  1. Churn Management in Mobile CommunicationsLedbyDr. E. Xevelonakis

  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 participantsduring a period Slide 2/19 SunTel Mobile Telecommunications

  3. Growth rates worldwide Slide 3/19 SunTel Mobile Telecommunications

  4. Reasons for churn • Easy to switch provider • Difficult to manage the customer data • Inadequate services • Quality of service • Plenty of attractive offers • Customer dissatisfaction Slide 4/19 SunTel Mobile Telecommunications

  5. Types of churn • Involuntary • Internal • Voluntary • Need to focus Slide 5/19 SunTel Mobile Telecommunications

  6. Data Transformation • Data identification • Data collection • Validation & Cleaning • Transpose to right granularity • Addition of derived variables • Preparation of Model Set • Conduct Modelling Slide 6/19 SunTel Mobile Telecommunications

  7. Propensity to Churn • Changes in spending or payment patterns • Recurrent or multiple problems or queries Slide 7/19 SunTel Mobile Telecommunications

  8. Customer profitability calculation • completed calls • call forwarding • failed calls • customer care calls • voice calls • directory info • data calls Slide 8/19 SunTel Mobile Telecommunications

  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 customers Slide 9/19 SunTel Mobile Telecommunications

  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 usage Slide 10/19 SunTel Mobile Telecommunications

  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 price Slide 11/19 SunTel Mobile Telecommunications

  12. Decision Trees Neural Networks Decision Trees or Neural Networks? • Decision trees • customer classification • easier to use • Neural networks • hidden pattern recognition • less costly • more advanced Slide 12/19 SunTel Mobile Telecommunications

  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 devices Slide 13/19 SunTel Mobile Telecommunications

  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 handsets Slide 14/19 SunTel Mobile Telecommunications

  15. Strategy • Keep both groups • Classic customers represent clients’ majority • Premium customers have high customer value • Design different market models for each group Slide 15/19 SunTel Mobile Telecommunications

  16. Past, present, future Slide 16/19 SunTel Mobile Telecommunications

  17. Latency effect • Need for immediate action • Undesired rise in churn rates • More dissatisfied customers Slide 17/19 SunTel Mobile Telecommunications

  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 transmission Slide 18/19 SunTel Mobile Telecommunications

  19. Greek market strategies • Incentives to use new technologies • Special economic programs • Discounts in handsets • Billing discounts • Advertisement Slide 19/19 SunTel Mobile Telecommunications

  20. The End… Thank you for attending our lecture!

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