Decisioning for Telecom Customer Intimacy. Experian Telecom Analytics

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1 Decisioning for Telecom Customer Intimacy Experian Telecom Analytics

2 Turning disruption into opportunity The traditional telecom business model is being disrupted by a variety of pressures from heightened competition and budget constraints, to new customer behaviours and exponential technological advances. The landscape is continually shifting. As a result, increasing revenue and retaining customer loyalty has never been so challenging. Market challenges From the penetration of giant foreign multinationals and the move of privatised national carriers, from fixed line to mobile, through to the arrival of ultra-cheap no frills operators, the telecom market is bursting at the seams. Retaining share is difficult enough; growing your market seems a distant memory. Given the maturity of the telecom space, with 100% penetration common, customer retention and customer intimacy is now more crucial than ever. Squeezed margins Volatile economic conditions and the consequent squeeze on wallets is driving customer behaviour to ever-increasing price sensitivity. Investing in new technologies when budgets are already under strain is proving extremely challenging. The combination of reduced margins and managing the cost of credit and fraud losses today means the ability to serve low-value customers and meet compliance requirements is increasingly critical. Exploiting the potential of big data The extensive growth of customer behavioural data can seem like yet another external pressure to be withstood. Similarly, analysing big data without the right tools can lead to a potentially confusing and unhelpful array of strategic possibilities. However, with the right expertise, these challenges can be turned into opportunities. Experian s advanced analytics services offer a robust approach to securing your profitability: Big data can be used for developing powerful predictive analytical techniques that anticipate a customer s future behaviours and actions. The potential insights that can be derived from customer information have created an unprecedented opportunity for telecom operators to improve and optimise their customer decision strategies. Using optimised decision strategies, telecom operators can now do more than ever to reduce the number of unprofitable customers and retain the most valuable ones.

3 Driving profitability through analytics In such a cluttered and fast-evolving business environment, steering a path to profitability requires a sharper focus on better processes and intelligent decisioning. Experian Telecom Analytics can help you achieve that focus. We enable you to implement strategies that drive profitability over the whole customer lifecycle. Smarter acquisition and retention We can show you how to use your customer data to develop new business models that support sustainable growth. Our advanced analytics ensure you maintain your existing revenue streams whilst also reducing churn. With Experian, you can: Gain insights for more profitable customer interaction and communication management. Improve customer intimacy using proven analytical technologies. Drive strategy design and retain your most profitable customers by aligning your product offerings with enhanced customer segmentation using simulation, champion-challenger testing and reporting. Extend profitability by leveraging up-sell and cross-sell opportunities. Establish more complete customer profiles, which open the door to relevant communication. 60% Analytics Drives Business Value 60% of practitioners are using analytics to generate a better customer experience, with more than half (52%) seeing strong outcomes as a result. Source: Accenture, Analytics in Action: Breakthroughs and Barriers on the Journey to ROI, 2013 Reducing debt exposure and churn A leading European telecom operator needed to differentiate between profitable lifetime customers and high-risk ones who threatened to increase debt exposure. Experian Telecom Analytics helped to deliver: 25% reduction in call barring No increase in bad debt No loss in customer spend Predicted increase in customer satisfaction levels Significant reduction in operational costs

4 Cutting your costs to serve From fraud management to prospecting, acquisition and customer management, we enable you to enhance your key business processes helping you to both reduce your exposure to risk and improve cost optimisation. With Experian, you can: Consistently identify excessive exposure to credit and fraud risk, enabling you to establish clear rules and actions to manage them. More accurately measure a number of strategic KPIs (including the actual cost of risk) to make business decisions that strike the optimal balance between risk and reward. Increase the clarity of reporting, raising the visibility of both problematic and successful processes. Implement better processes across the customer lifecycle (e.g. collections, marketing campaigns, acquisition) by focusing on the actions that achieve optimum results. Improve the customer experience by streamlining attention on the right customers. Achieving strategic clarity Today s data growth wave presents a stark choice: exploit it to succeed, or fail. Working with Experian enables you to see the profitable possibilities available to your business, and define the strategy you need to achieve them. With Experian, you can: Harness the power of data insight to drive your commercial strategy and increase your competitive advantage. Increase the loyalty of your most profitable customers and create new up-sell and cross-sell opportunities. Cost-effectively allow more low-value and high-risk customers to churn. Use data-driven decisions to evaluate new business models, exploit the potential of new channels to market and minimise risk from non-validated decisions.

5 Extracting more value from the customer lifecycle Optimising decisions across the customer lifecycle to enhance business performance, Experian Telecom Analytics combines best-in-class predictive analytics techniques and tools with consultancy services. By integrating all available data (internal databases, external data assets, etc.), we can analyse all stages of the customer lifecycle. This intelligence is then converted into deep customer insights, with actionable models that enable more profitable decisioning. Unlocking the gateway to growth Enabling you to maximise opportunities for revenue growth and efficiency, we provide a broad range of capabilities across all stages of the customer lifecycle to improve customer profitability. Our consultants help you target the critical areas in your strategy and map them to solutions that deliver tangible results. Throughout the customer lifecycle, risk management is key to maximising profitability. From prospecting through to acquisition, and customer management to collections, a robust and proven approach to credit and fraud risk management is essential to control potentially critical losses. In the early days of the telecom industry, generous margins offset relatively large levels of bad debt and fraud losses. Today, because of shrinking margins and technology factors (increased cost of devices), even big revenues can result in unsatisfactory margins if the cost of risk and fraud are not accurately anticipated and managed. As a result, implementing the best customer strategies to strike the optimum balance between risk and reward is a big factor in the quest for profitable growth. This balance can only be achieved by combining insight into your customers behaviour with your decisioning process. To deliver real business benefits, our consultants and analysts use their extensive telecom experience to equip you with credit and fraud risk management solutions that integrate with your current systems. By continually improving our analytics tools, we also ensure you always have best-in-class decisioning technology supporting your profitability strategy. Stage-by-stage benefits Our advanced analytics and powerful tools for credit and fraud risk management deliver value at every stage of the customer lifecycle. Collections Customer Management Data Fraud Management Prospecting Acquisitions Some of the benefits you can expect with Experian Telecom Analytics: Prospecting Penetrate new target markets Improve response rates Increase application volume Acquisitions Improve operational efficiency Review approval rates Increase activation and take up rates Maximise client share of wallet Reduce credit risk Reduce fraud risk Minimise attrition Customer Management Improve customer experience Improve retention and revenue Reduce credit risk Reduce fraud risk Cross-sell and up-sell Collections Reduce charge-offs Improve operational efficiencies Increase recoveries Maintain customer experience Fraud Management Limit fraud losses Reduce operational costs Maximize a positive customer experience

6 Prospecting Enhancing prospect and customer insight is key to efficiently growing your customer base. By analysing both internal and external data sources, you can create a deeper understanding of their propensities and user profiles. This enables more accurate targeting, so you can identify the right offer, the right channel and the right time to approach them. Applying this more informed, data-driven strategy allows you to capitalise on business opportunities and reduce costs. Meanwhile, keeping credit risk costs under control delivers maximum return on investment. The ultimate result is the growth of a valuable, loyal customer base. Acquisition Identifying the right customers, applying the right acquisition strategies and reducing operational costs are all key challenges at this stage in the customer lifecycle. Predictive models traditionally helped identify the desired risk-value balance. However, these models are now also being used to pinpoint never-pay and identity fraud risk. Acquisition analytics provide great insight into customer lifetime value. What s more, using this information at acquisition delivers better risk control and reduces operational costs whilst delivering improved levels of customer service. Customer management Customer usage patterns and bill payment behavior trends add breadth and depth to your customer knowledge. By accurately managing and distilling this information, you develop a holistic customer view of their risk and value. This can be used to drive next best action strategies: what to offer, to whom, when and how with the goal of increasing customer loyalty and retention, and reducing churn. Targeted up-sell and cross-sell campaigns can increase the average ARPU/AMPU. You will more readily identify bust out fraud loss potential, and you can reduce bad debt by setting appropriate limits (helping prevent bill shock). Smarter decision automation also helps reduce overall operational costs. Collections Managing collections is a delicate balance of the right way to treat bad customers vs good customers and the wrong decisions can adversely affect portfolio performance. So accurate knowledge and understanding of their profile and behaviour is hugely important, especially when excluding good customers from your collections activity will immediately improve customer satisfaction. Applying analytics to cluster delinquent customers based on risk factors vs potential value can be used to drive decisioning about collection timing and methods. A one-size-fits-all approach is no longer valid. Tailoring your collection strategy to the customer s profile reduces credit losses and bad debt, and significantly improves collection efficiency. With better customer information, you have more dynamic debt collection, agency placement, case management and more optimised decisioning.

7 Five steps to where you want to be Informed by our deep and extensive experience across the sector, Experian Telecom Analytics comprised five phases: Assess Design Develop Implement Monitor & Improve 1. Assess the business challenge At the heart of our solution is consultation to develop a deep understanding of your strategic goals. We need to ensure that the analytical solution we propose is fully aligned with your objectives and takes your current processes and capabilities into consideration. This in-depth understanding then helps us tailor your solution, using processes and tools that we benchmark against industry leading practice. By assessing the business challenge in this way, we help you to be as effective as possible. 2. Design the solution The end-to-end solution we define is focused on return on investment, combined with meeting business and operational requirements. The solution we propose will always consider: Available data assets, data quality, and data enhancement strategies (e.g. using credit bureau data or other external sources). Portfolio segmentation, for the identification of portfolio clusters to be managed separately (e.g. late vs early collection, existing vs new customers, high value vs low value customers). Solution type and complexity, drafting the analytical approach (which will be validated in the development phase) to maximise the value of each portfolio cluster. Key performance metrics and a monitoring plan, in order to ensure that expected benefits are achieved. Future requirements, to safeguard future growth against disruption or additional expense.

8 3. Develop predictive models Working in tandem with you, our analytical experts develop the solution to help you achieve your business goals. The business analytics we deliver embed the business view, paying specific attention to: Robustness of results (e.g. prediction accuracy, minimising any errors). Size of operations (e.g. ability to produce value given your organisation s existing capabilities). Orientation to process the new models and tools must fit seamlessly with your existing or newly optimised processes. 4. Implement the solution Our approach to integrating the advanced predictive models into your infrastructure and software is designed to optimise their performance and deliver quantifiable benefits back to your business. We always include full documentation to ensure smooth software implementation. If your organisation requires additional application infrastructure to supplement the current legacy environment, we can also advise on suitable software solutions. 5. Monitor and improve the value to your business Our view of deployment is not limited to the delivery of analytics. Instead, we commit to enduring partnership and consultation with our clients, and we support the ongoing process monitoring and fine-tuning the solution that has been deployed to ensure it delivers value over time. In the same way that we demonstrate that our solution addresses the problems identified in the initial assessment, through improvement in the key performance metrics, we provide constant monitoring to demonstrate continued value to your business and alignment with business objectives. Throughout our partnership, our consultants can advise you about additional ways to leverage your model and make any changes required to meet future business requirements.

9 Better analytics. Better decisioning. Better value. Combining international experience with local understanding, we have worked with telecom operators globally across all aspects of their business. Our collaborative approach with our customers has enabled us to apply a 360 perspective to provide solutions that deliver tangible operational value to the business and improve customer intimacy. As a trusted enterprise partner delivering proven models, we continuously develop and enhance our models. From the key strategic objectives of increasing revenue, decreasing costs and reducing churn to tactical implementation across a range of infrastructures, we understand your sector, your challenges and your way forward. Steering strategic sales success By equipping you with deeper insights into customer behaviour and risk profiles, we enable you to deploy optimum strategies and processes for cross-selling, up-selling and creating targeted offerings to existing customers. This gives you the ability to design strategies for improving retention and customer satisfaction, and identifying your best prospects whilst maintaining margins and growing the value of your most profitable customers. We help you harness and focus the power of customer intimacy. With Experian, you can: Utilise market leading analytics to identify and develop real competitive advantage Implement sophisticated customer profiling and data analysis at every stage of the customer lifecycle Work smarter by focusing on driving business instead of reacting to unforeseen problems Use rich information to drive future strategies Manage risk and control costs Our enhanced risk measurement solutions allow our clients to streamline processes, reduce exposure to financial risk, reduce fraud and gain on cost optimisation levels. Our expertise helps you: Reduce process complexity for better efficiency and improved profitability Develop a future-proofed model to facilitate adapting to changing market requirements whilst limiting additional investment costs Access better management data for insights into cost-saving measures and early identification of potential fraud

10 Combating online fraud When one of Europe s leading telecom providers launched online direct sales, fraudsters immediately committed identity theft to access services and the latest handsets. Experian Telecom Analytics helped to deliver: 88% reduction in online fraud Reduced fraud losses and write-offs Increased speed of application processing and reduced costs for manual fraud detection

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