1. Churn Management
in
Mobile Communications
Led by
Dr. 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 participants during a period
SunTel Mobile Telecommunications Slide 2/19

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

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
SunTel Mobile Telecommunications Slide 4/19

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

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

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

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

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
SunTel Mobile Telecommunications Slide 9/19

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
SunTel Mobile Telecommunications Slide 10/19

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
SunTel Mobile Telecommunications Slide 11/19

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 advanced
SunTel Mobile Telecommunications Slide 12/19

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
SunTel Mobile Telecommunications Slide 13/19

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
SunTel Mobile Telecommunications Slide 14/19

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

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

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

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
SunTel Mobile Telecommunications Slide 18/19

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

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