BOOST CUSTOMER LIFETIME VALUE - SUBSCRIBERS, ASSEMBLE!
ANALYZE BEHAVIOR BEFORE THE POINT OF NO RETURN Humans are creatures of habit. We have patterns we like to stick to, and the better you know someone, the more patterns you pick up on. That’s why superheroes always seem to know what their rival is going to do next or where they’ll be - they know how they operate.
Instead of managing delinquency risk by analyzing known patterns that offer early warning signals for default risk, a more typical approach is a reactive one, focusing on subscribers who have already missed payments 9 . However, this reactive approach doesn’t kick in until your business suffers losses.
Telcos, like most businesses, rely on popularity to operate. Unfortunately, many telcos have a retention problem— around three-quarters of new wireless subscribers are coming from a different provider 10 , often because of factors like negative customer experience and intense industry competition. Between the abandoned revenue and high acquisition costs that can hit over $500 per subscriber 11 , maintaining current churn rates is an outcome that will hit your revenue numbers hard. So, what can you do if, like most telcos, you suffer from high churn rates?
Develop industry leading retention strategies. When weighing retention strategies, you have a unique opportunity to increase the lifetime customer value of your portfolio, not only through longer relationships with subscribers, but by optimizing and personalizing plans, products, and financing options. For the most impactful subscriber retention plan, include the following elements: • Data-driven analytics to optimize pricing, upsells, and cross-sells • More personalization to improve the customer experience
Use Your Data Superpowers for Behavioral Insights
One opportunity for improvement is to take advantage of behavioral scoring that alerts you to early warning signs of risk and in turn triggers pre-delinquency processes to help minimize losses. This can be powered through in-depth behavioral analysis, which provides deeper insights into the financial health of a subscriber than payment history alone, and helps you evaluate the most effective intervention process you can take to minimize losses. Collect behavioral data from onboarding through the duration of the customer lifecycle and analyze it to watch accounts more likely to default. Revealing behavioral data might include:
• Purchase patterns: using RFM analysis, note the recency, frequency, and monetary spend of purchases to assess risk - has it changed? • Geolocation: if a subscriber once lived in a downtown high rise, but has downsized in the suburbs, it could indicate financial hardship The best behavioral insights to flag potential future defaults come from systems that can: • Pull data from a wide breadth of sources for more accurate assessment • Provide flexible risk modeling that is easily adjustable • Synthesize behavioral data to derive credit signals
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