Telcos tap analytical CRM to evaluate offerings.
For telecommunications companies, business is about opportunity and competition. Nearly 20 years after telephone industry deregulation, these companies have tremendous opportunities to sell customers a variety of telecommunications products and serviceslocal, long-distance and wireless phone services; Internet access; and phone cardsbut there is also no shortage of companies selling the same products and services.
To better retain customers and sell them new services, many telecommunications companies have turned to analytical CRM (customer relationship management) solutions to discover opportunities and compete successfully.
"The profit pressures in this business are always intense," said Pam Crumpler, director of marketing communications at Sprint Communications Corp.s Global Markets Group. "As the environment becomes more competitive, you have to look for ways to provide better service to your customers. CRM plays into that. It can give you a lot of different ways to reach growth in a profitable manner."
The Dallas-based Sprint Global Markets Group has built an application called MkIS MarketMine using analytic and data management frameworks from SAS Institute Inc., of Cary, N.C. The application, which will be announced this week, even though the companies have been working together since last summer, is used by Sprint database analysts to perform precise market segmentation, trending and modeling; customer analysis; and reporting using centralized customer data from disparate sources.
"Were giving decision-support applications to our [marketing department] end users so that they can understand when to go to market, how to go to market and how to communicate with the customers," said April Killion, group manager of marketing information solutions and analytics at Sprint.
In so doing, Sprint is trying to understand what products and services are helping to retain customers and which ones are "churning," that is, experiencing a loss of customers who switch to other service providers.
The MkIS MarketMine software "allows us to differentiate ourselves in the marketplace by better understanding how to reach our customers, whats effective and what their needs are," Crumpler said.
Sprint can also use the SAS-based application to target customers who are loyal and avoid customers who are switchers and change service providers frequently for the lowest-priced offers, Killion said. In addition, she said the application has cut down on processing time by consolidating customer data from multiple sources into one database.
"We can satisfy our marketing and sales needs in a timely manner," Killion said. "We can process data in hours and minutes, rather than days and weeks."
Sprint has reduced its customer churn rate from 6 percent to 2 percent since employing database marketing. But Killion said its too soon to say how much of that reduction can be credited to the SAS CRM application.
Other telcos are deploying analytical CRM as well.
When Doug Clark joined Northern Telephone, a small carrier in New Liskeard, Ontario, five years ago, he was surprised at how little customer analysis the company was doing. But as the company transitioned from a regulated environment to a more open, competitive one, it had to focus its selling efforts on what customers were buying.
Northern Telephone enlisted Ottawa-based Cognos Inc.s PowerPlay multidimensional reporting solution to get a better fix on its customers buying habits.
"The PowerPlay solution enabled us to peel the onion," said Clark, manager of Data Warehousing. "Weve been able to move towards customer segmentation."
PowerPlay helped Northern Telephone figure out what its highest- value accounts were and how to sell additional services to those accounts, such as Internet services, voice mail, caller ID, call waiting and cellular subscriptions.
Its also used PowerPlay to figure out whether it was meeting its sales targets and understanding selling trends.
"The core payback is that we get a much faster, more accurate picture of how our revenues are growing," Clark said. "The major thing has been our effectiveness, our ability to respond to whats going on in the business. We can see whats driving sales and turn around and put together a marketing campaign to respond to the trends weve seen developing."
Clark said PowerPlay has enabled Northern Telephone to run a leaner operation, as it needs two fewer analysts to analyze reports. He said the company is now in the process of extending the technology to analyze customer interactions at its call center and Web site.
"Theres no end of applications coming down the road," Clark said.
Sprints Crumpler said MkIS MarketMine has given her company the foundation for what it wants to achievea single view of the customer.
"Weve built a platform that allows us basic capabilities for analytics and crm processes across the entire organization," she said. "Weve pulled together information for the group as a whole as opposed to a silo event.