FICO Winning Strategies for Telecom Customer Management
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© 2016 Fair Isaac Corporation. All rights reserved. 1 Today it’s easy for customers to leave, and they have fewer reasons to stay. In saturated telecom markets, competitors offer similarly high levels of coverage and service. Years of price-based competition have left little room for differentiation and margins are stretched thin. To keep customers happy, you need to give them the devices, lines, features, apps and services they want— making relevant offers they can afford that are profitable for your business. Your strategies have to balance the complexities of credit risk, channel characteristics and agreements, price sensitivity, purchase motivators, attrition risk, profitability, lifetime value, and more—adapting as customer needs change over time. Whoever has the best strategies and can execute quickly wins Two of the most important business questions for telecoms today are: “What can I do to keep profitable customers?” and “What else can I do to drive revenue growth and customer relationship value?” Finding the answers and successfully operationalizing them starts with giving business experts the means to quickly develop, test, scale and improve analytically driven automated strategies. FICO strategy tools incorporate expertise from more than 60 years of automating complex decisions in highly regulated industries. They’re preconfigured for key telecom strategies like device financing, voluntary churn reduction, service or plan modification, product cross-sell and predelinquency intervention. Business users can easily change any decision process and fold in new data sources, customer characteristics and analytics, including scorecards and other models, without need for IT assistance. MARKETING & CUSTOMER ENGAGEMENT “The key question when we bring on a new customer is ‘Will we be able to evaluate this customer and determine what offers help us retain a profitable business?’ ” Credit Analytics Manager Major North American Telecom Company
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Transcript of FICO Winning Strategies for Telecom Customer Management
© 2016 Fair Isaac Corporation. All rights reserved. 1
Today it’s easy for customers to leave, and they have fewer reasons to stay. In saturated telecom markets, competitors offer similarly high levels of coverage and service. Years of price-based competition have left little room for differentiation and margins are stretched thin. To keep customers happy, you need to give them the devices, lines, features, apps and services they want—making relevant offers they can afford that are profitable for your business. Your strategies have to balance the complexities of credit risk, channel characteristics and agreements, price sensitivity, purchase motivators, attrition risk, profitability, lifetime value, and more—adapting as customer needs change over time.
Whoever has the best strategies and can execute quickly winsTwo of the most important business questions for telecoms today are: “What can I do to keep profitable customers?” and “What else can I do to drive revenue growth and customer relationship value?” Finding the answers and successfully operationalizing them starts with giving business experts the means to quickly develop, test, scale and improve analytically driven automated strategies.
FICO strategy tools incorporate expertise from more than 60 years of automating complex decisions in highly regulated industries. They’re preconfigured for key telecom strategies like device financing, voluntary churn reduction, service or plan modification, product cross-sell and predelinquency intervention. Business users can easily change any decision process and fold in new data sources, customer characteristics and analytics, including scorecards and other models, without need for IT assistance.
MARKETING & CUSTOMER ENGAGEMENT
“The key question when we bring on a new customer is ‘Will we be able to evaluate this customer and determine what offers help us retain a profitable business?’ ”
Credit Analytics Manager Major North American Telecom Company
MARKETING & CUSTOMER ENGAGEMENTWinning Strategies for Telecom Customer Management
© 2016 Fair Isaac Corporation. All rights reserved. 2
Better strategies for the defining moments in customer relationshipsBringing more analytic insight into decisions about existing accounts helps you keep valuable customer relationships and build their profitability over time. Putting the tools to create and modify decision strategies into the hands of your business experts makes you nimble in the face of market change and maneuvers by competitors.
Below are some of the critical decision areas where FICO strategy tools help you outperform your rivals.
Device financing. Make it affordable for existing customers to stay with you while satisfying their yearning for the latest smart mobile devices. Offer attractive financing options that appropriately minimize buyer out-of-pocket expense. Stock a pre-approval database with compelling offers on new, and discounts on older devices.
Your account management team can easily create financing decision strategies that incorporate credit risk and behavior scores assessing the customer’s ability to pay. They can also fold additional analytics into the process, such as models that predict
likelihood of offer acceptance as well as initial profit from the transaction and impact on attrition risk and customer lifetime value.
Voluntary churn reduction. Substantially move the needle on this all-important performance metric and incessant drain on profitability. Business users can create strategies that use attrition scores based on customer profiles and activity data like age of mobile device, dropped call incidents and customer support interactions to finely segment your customer base according to risk of account closure within specific timeframes. Strategies mitigate the risk by automating proactive measures, such as offering an additional wireless line or a discount on a new mobile device.
Service/plan modification. Meet the growing needs of your customers and respond early to signs of rising or falling credit risk. Strategies can incorporate behavior scores as well as transactional analytics that reveal more detailed customer call and payment behavioral patterns. Business experts can create business rules that use the output from these analytics to automate timely adjustments to existing credit restrictions and to expand or contract
the range of product and service offers the customer is eligible for.
Cross-selling of financial products. Improve business performance amid market saturation and margin compression by selling more products and services to your customers. Analytics-driven strategies can identify candidates for financial products, such as private label credit cards, and assign risk-appropriate credit lines.
Pre-delinquency intervention. Identify accounts showing the first signs of payment difficulty or increasing credit risk, then take proactive action. Pre-delinquency strategies incorporating analytics and business rules can trigger actions like automated messages via customer-preferred channels and/or temporary credit restrictions to reduce your risk exposure and help customers keep accounts current. Avoiding delinquencies improves customer satisfaction and lowers collection costs and attrition risk.
Multiple decisions in an instantIn operations, with a single request from your account management or other customer-facing system, the FICO decision engine can execute multiple
“Rather than competing on price — the model virtually every company has followed in the past two decades — operators must figure out how to optimize revenues from different customer segments, especially those that are less price sensitive and that value service quality and superior customer experiences.”PwC 2015 Telecommunications Trends
FICO is a registered trademark of Fair Isaac Corporation in the United States and in other countries. Other product and company names herein may be trademarks of their respective owners. © 2016 Fair Isaac Corporation. All rights reserved. 4222PS_EN 08/16 PDF
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MARKETING & CUSTOMER ENGAGEMENTWinning Strategies for Telecom Customer Management
decisions in any order specified. For instance, a set of interrelated decisions might amount to: “The customer is eligible for this cross-sell offer, but don’t make it now, as an account payment is past-due. Instead, initiate a predelinquency reminder via text message.”
Understandable, explainable decisionsAs telecom credit policies, customer management and marketing grow more complex, it can become difficult to fully grasp—much less explain—how decisions are being made. While analytically driven strategies are essential, the old “black box” approach, where data is input and a score or recommended decision is output—with no transparency into what happened in-between—is no longer
acceptable. For business performance and regulatory compliance, nontechnical staff need full visibility into and control over the entire decision making process.
FICO strategy tools let business users easily navigate complex decision strategies and zoom down into the elements (calculated variables, scores and rules, for example) used at any point. Once the strategy has been deployed in operations, if a question comes up about a decision, users can immediately determine the credit policy rules and models invoked.
Nonstop learning and improvementFICO strategy tools include adaptive control for systematically performing in-market “champion-challenger” contests
pitting proposed new strategies against business-as-usual. This approach—which FICO® pioneered in the 1980s—makes it easy to learn from what works and what doesn’t, promote winning strategies and continue to improve performance.
The trends characterizing today’s telecom markets—more choice for consumers, more types of competitors and more regulatory scrutiny—show no signs of abating. Even the best customer management strategies must be viewed as steps along the way to greater success.
.Learn how FICO can help
you build and keep valuable
customer relationships at
www.fico.com/strategiesfortelecom.
Giving business experts the tools to create and modify decision strategies
FICO strategy design tools include fully configurable decision strategies for common telecom decision areas. Business users can modify these and also create new ones.
