“Customer lifetime value”

Achieving a true 360-degree view of the customer, or as close as you can get to it, reduces churn, grows revenue and increases market share. A holistic customer view allows your marketing department to keep an eye on the current user experience in real time, but it also helps in predicting a customer’s future behavior. One specific metric, the “customer lifetime value,” or the projected revenue a given customer will generate over his or her lifetime, is critically linked to customer experience. 

A smartly deployed Big Data customer-analytics solution should be able to deliver this metric and give your marketing department the tools it needs to figure out which customer segments have high loyalty and long-term profit value. ARPU, or average revenue per user, doesn’t take either of those into account, but CLV does; by employing it, marketing campaigns can be targeted to strengthen the spending of loyal customers rather than ones with a high likelihood of churn. 

There are several factors that dictate a customer’s CLV. It should incorporate the costs of installation and activation, customer acquisition, service administration, and even regulatory costs associated with a particular customer, while on the revenue side deposits and activation fees, among other things, must be considered. Predicting opportunities for the upselling and cross-selling of services, however, requires a lot more fine-tuning. Aside from data integration and customization, the quality of analytics like the CLV metric and the realization of its full potential value requires smart marketing teams with clear strategies for gaining — and holding — market share. 

Yield management

Customer analytics allow CSPs to engage in yield management of their services. Long used in industries with perishable products like airline seats or hotel rooms, yield management is one way to turn customer analytics into actionable information. For customers it means they can receive a discount on services when their CSP’s network isn’t being overutilized (thus mitigating network congestion and ultimately producing a more positive experience for the customer). This method is already common with utilities, which offer discounts, for example, for not consuming electricity during high-demand hours, which in turn creates an incentive for customers, who feel like they’re being rewarded.

Once a CSP invests in customer analytics, there are some concrete steps it can take within its organization to maximize return on investment (ROI), according to an Alcatel-Lucent white paper that explains how to adopt a transformational strategy:

Step one: Make a top-level executive responsible for customer experience and BI.

Having a single person tasked with overseeing the customer experience can help in evaluating where issues and failures are likely to arise. Is billing a consistent drag on your company’s business rep? Is your Twitter feed blowing up because of response-time lags? A CEM executive will be able to take a high-level, holistic look at the customer in a way that individual business managers, dug into their own bunkers, probably can’t. 

Step two: Implement a comprehensive analytics platform whose capabilities include:

• flexible extract, transform and load (ETL) processing;

• data-warehouse technologies that support columnar databases; 

• telecom-specific data modeling;

• data-mining and predictive-analytics algorithms; 

• flexible reporting and visualization;

• event stream processing (ESP);

• API (application programming interface) access from real-time applications. 

Step three: Get experienced consulting. 

For all the promise of customer analytics, predictive and otherwise, the business intelligence is often only as useful as the questions that are asked. CSPs that are looking for customer analytics to reduce churn, inspire loyalty, roll out new services, and boost ARPU are limited by the same old-world constraints all marketers have faced: the customer is a fickle friend who still happens to always be right. But if you provide a good, reliable service at a good value, the customers will be there. Just try to remember that the next time you step in front of a fire hose.