Using business intelligence to cut customer churn

Among the challenges for many enterprises in today’s competitive environment is how to reduce the churn rate of their customers and improve retention. However, this is something that a growing number of firms are recognizing can be tackled with a strong business intelligence and analytics strategy.

One company that has been seeing great results from this is O2 Ireland, part of the Telefonica Europe group, which recently featured in a case study in Computer Weekly.

It was observed that it sees a wide variety of customer buying behavior, with some expecting to sign long-term deals, while others may only use the service for a short time, for example while on a business trip to the country.

Peter McKenna, head of business intelligence at O2 Ireland, therefore said: “Given their array of behaviors, it doesn’t make sense to invest in all customers in the same way. We want to invest in the customers we can influence and the customers who are really engaging with us.”

This is where strong data analytics solutions come in. Mr McKenna explained how his firm used advanced data warehousing technology to solve the problems it previously had with disparate information that had no overall management solution and bring it under control.

In the past, the company used a range of different systems to capture and analyze data, which led to high IT costs, additional latency and decisions that did not make sense.

“An event might be analyzed up to ten days after it happened, by which time the opportunity to do anything was very limited,” he said.

However, with better data warehousing and real-time analytics solutions, these issues have been eliminated, allowing the company to improve its results.

New applications can now be built without the need to reconstruct databases and other infrastructure from scratch, which dramatically lowered the total cost of ownership for the firm’s data warehousing tools.

Now, the company delivers data to this from over 130 different processes every day. The organization is also able to replicate its entire customer relationship management and billing system on to the data warehouse every day, while some processes can be studied within 15 minutes.

Mr McKenna stated this has allowed the company to study the use of prepaid SIM cards more effectively. As a result, it was able to identify the 65 percent of customers who have a real relationship with the company and target their investments towards these individuals, instead of wasting resources on consumers who are highly unlikely to remain loyal.

However, Mr McKenna observed that in order to make a success of this new business intelligence strategy, the firm had to change its corporate culture and ensure that personnel at boardroom level appreciated the benefits of using big data.

He said: “What a lot of them were looking for was a project; a box to tick. What we need to do is to make sure that they realize it’s a way of working. That takes education.”

As the world continues to evolve and competition gets smarter, he added it will be essential to ensure that C-level executives understand that business analytics is a way of working that needs continuous investment and the establishment of a knowledge-driven culture throughout the company.