Why location intelligence is the key to addressing customer churn
The structure of network traffic is changing. It is estimated that 31% of smartphone users now make no traditional voice calls in a given week, and 36% of 18-24 year olds are ‘data exclusive’, so the pressure on infrastructure providers is increasing rapidly. In its latest Visual Networking Index, Cisco forecast data traffic will reach 49 Exabytes within the next five years. An exabyte is equal to a quintillion, and 49 quintillion looks like this: 49,000,000,000,000,000,000. That’s a lot of data traffic.
Improving 4G availability and fine-tuning 5G roll out will help meet demand and improve connection speeds. This should help to reduce churn too, as slow connection speed is the main reason for consumers leaving or planning to leave a mobile operator, according to an Ovum study. But there is a lot more to churn than connectivity. Poor customer experience is another major factor causing churn. Plus, as handsets become more complex, customers are likely to need more support, placing more pressure on providers. With the global average for mobile churn standing at 23%, mobile operators need to refine their service delivery and customer experience strategies to meet ever-increasing expectations.
A flexible society
Mobile operators also need to address the behavioural shifts and changing demographics within their customer bases if they are to reduce churn. For example, millennials are hyperconnected, cost-conscious citizen journalists happy to share their experiences digitally, and willing to switch providers in order to get the best value. Their flexible lifestyle and communications choices are generating new business models. Asset-light companies like AirBnB are responding to a preference for flexible travel, and even insurance firms are reshaping their traditional thinking by offering options such as usage-based insurance. This preference for consumer flexibility stretches to the energy industry too: figures show that 2016 was a record year for consumer switching across the board, with five million people changing their energy supplier.
Within this consumer-empowered agile environment, tying in consumers to 18- or 24-month mobile contracts seems outdated. Pay-as-you-go does not always fit the bill either with high costs for handsets or the possibility of running out of credit. Network operators can entice their customers by bundling TV channels, but on-demand services are quickly diluting those business models. Fixed line services are falling out of favour, so adding that to the bundle isn’t compelling enough either. Mobile operators must take steps to find new ways of improving their customer experience and service delivery, to keep their customers and reduce churn.
Location intelligence reducing churn
To make a positive impact on customer churn, mobile operators should take an intelligence-led, data-driven approach. Location intelligence, in particular, unlocks a world of real-time insight for mobile operators and network planners.
This insight can be used to drive a proactive retention strategy, improving the customer experience, enhancing service delivery and ultimately reducing churn in the following ways:
- Identifying customers at risk of churn using data such as the most up-to-date demographics
- Supporting customer onboarding by providing information on nearby stores
- Driving accurate network planning by locating areas where calls are dropped, such as those of high-density population, and identifying areas where the signal is of low strength, pinpointing areas of investment
- Targeting customers with personalised advertising based on their geography with offers that drive loyalty, such as local cinema and restaurant vouchers
- Crafting a geographic profile of a client’s mobility, such as their daily journeys and sending them best value tariffs
- Delivering proactive service assurance by proactively informing clients of outages and providing accurate times to fix
- Gaining deeper understanding of usage statistics, leading to improved SLAs
- Improving the allocation of customer service resources based on accurate location of outages, proactively identifying outages, and ensuring local call centres are resourced to answer calls and provide accurate time to fix
- Improving the intelligence available to customer service teams so they provide an accurate, informative service and a real-time understanding of outages, for example
- Drive decisions around capacity planning and service optimisation, pinpointing the best locations for cell towers, small cells and wifi based on actual performance
- Delivering an improved service through better capacity management
- Freeing bandwidth thereby improving network capacity
- Generating cost efficiencies generated through enhanced network planning, potentially passed to customers who would experience lower tariffs
- Improved forecasting, locating customers most likely to churn and targeting them with offers/improved tariffs
Location intelligence can also provide operators with analytics to develop new revenue streams, which can be reinvested to improve the customer experience and reduce churn. Data which could potentially be monetised includes calling, texting and data usage patterns, location data, demographic, geographic and psychographic composition of customers, social media data, and weather data, news and events.
Access to location intelligence has a critical part to play in a mobile operator’s retention strategy, providing direction and reducing churn in a fiercely competitive market.
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