CATEGORY: Analytic Applications

REVIEWER: Michael Chin, senior programmer in the information technology department of Cellular One Puerto Rico.

BACKGROUND: Cellular One started operations in Puerto Rico in 1991 and today is the leading cellular provider with more than 50 percent market share. The company has expanded its services to include cellular, beeper, long distance, prepaid cellular, prepaid long distance and CAP services.

PLATFORMS: Churn/CPS from SLP InfoWare, Inc. runs on Windows NT.

PROBLEM SOLVED: Cellular One Puerto Rico wanted to improve the effectiveness of the retention department. This department performs outbound calls to current subscribers in an effort to improve retention. About two and a half years ago we began to experience significant subscriber churn. With the implementation of Churn/CPS, Cellular One Puerto Rico has since enjoyed a 35 percent decrease in subscriber churn. The customer knowledge generated by SLP InfoWare's customer retention software application helps to equip our customer service agents with outbound marketing campaigns that have a high propensity of being accepted by subscribers on an individual basis.

PRODUCT FUNCTIONALITY: Churn/CPS allowed us to develop departmental procedures that target specific segments of our subscriber base. In the future, we may use Retain/CPS for its reporting capabilities. The software simplifies and automates the process of identifying churn and attrition. Churn/CPS automatically analyzes customer behavior information to determine the drivers behind subscriber churn. The results of this analysis are then used to create the most effective behavior model which, in turn, helps us to identify which subscribers are likely to churn. With this knowledge, our outbound agents can call subscribers – identified as likely to be delinquent on their payments or prone to switch providers – and offer them more economical service plans better suited to their usage or to cross-sell and upsell additional services.

STRENGTHS: The product allows wide flexibility in the creation of behavioral models, which is natural since factors associated with subscriber churn often change in accordance with marketing cycles. Overall, Churn/CPS has helped our agents to become much more confident about making outbound calls to subscribers because they better understand the reasons behind each subscriber's behavior. This improves the agents' success in retaining subscribers which, in turn, supports employee morale.

WEAKNESSES: At the present time, we decided not to integrate Churn/CPS into our production system. The product functions as an outside component which stands alone on a PC with the result file fed into our system. [Note: Churn/CPS is capable of full integration with the production system.]

SELECTION CRITERIA: After conducting an extensive evaluation phase, Cellular One Puerto Rico selected Churn/CPS in August 1998 and deployed it just four months later, initiating its proactive customer retention strategy with a telemarketing campaign. The results obtained with this campaign, and the ones that followed, proved the software's capability to identify the customers with the highest probability to churn as well as the customers' reasons for churning. We were looking for proactive ways to identify and approach customers that might potentially churn. With the entry of new competition to our market, we realized that in order to maintain our leadership we must maintain a stronger relationship with our customers through loyalty programs. By using Churn/CPS to identify the customers that are most vulnerable, our retention ratio for these campaigns has improved significantly. Continued support was also a major factor in the decision-making process.

DELIVERABLES: Churn/CPS produces a model which contains statistical reasons for recent subscriber churn. This is used to evaluate the subscriber base for the same factors. The final output is a list of subscribers most likely to churn and the most likely reasons for their leaving the network.

VENDOR SUPPORT: At the present time, I do not have any issues to report.

DOCUMENTATION: The documentation, provided on CD-ROM and in print, is comprehensive and easy to understand.

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