Advanced Analytics: A Sublime Weapon of Market Domination (WMD)

After a rapid growth since its birth telecom industry has reached a more matured stage of its life cycle in
our market. The operators have started to feel the hit of remaining or becoming profitable and to increase
customer loyalty. As a result, the focus of mobile operators has shifted towards better understanding their
customers and their buying habits and patterns from just acquisition. In this process, Business Intelligence
(BI) is steadily taking the centre stage in the telecom industry. Across the world the operators are
embracing BI as a strategic tool to help them remain competitive. It provides them with a comprehensive
knowledge of the factors that impact their business and help them make better business decisions by
analyzing data from inside and outside the organization. The Advanced Analytics (AA) team of
Grameenphone has been formed to lead the line in the field of BI and to provide the organization with key
insights required to remain competitive and dominant in the market.

Means and Methods:

Segmentation is a much practiced technique in telecom business. Properly defined segments are valuable
resources that can be communicated, offered and satisfied effectively and, at the same time, efficiently.
Behavior and consumption pattern of particular segments help tailor appropriate products for the target
market. Segmentation also ensures optimized use of resources and significantly reduces cost and, in the
process, increases profitability.

Traditionally, CDR is the main source of data to analyze customer behavior and DWH is the media which
provides access to that. Now we are trying to find micro-segments with predefined variables. This
approach serves well to some extent. But this approach ignores a customer’s potential of buying
profitable products in the future. A customer may also serve as an excellent reference for more profitable
customers. Extensive and modern analysis methods like Affinity analysis or market-basket analysis and
Social Network analysis (SNA) can provide solutions to some of these shortcomings. Implementing
probabilistic approach can also help us attain better accuracy.

Figure: Advanced Analytics techniques, like SNA, can give answer to many paradoxes
Affinity analysis reveals linkages between products that are likely to be purchased together and between
product groupings and customer segments. These affinities can be, at times, extremely difficult to unearth
and often business intelligence systems are used for this purpose. These systems use a technique called
‘association analysis’ for arriving at the right combination of products and services for a customer or
customer segment.

Ongoing micro-campaigns (including cross-selling and up-selling) that are adopted by CRM is a natural
outcome of customer segmentation. Often data mining is used to develop predictive models to establish
the buying propensity of a segment towards various existing or new products. Armed with this
information, marketing managers can design specific campaigns targeted at individual segments.

Customer attrition or customer churn has gained increased importance in the recent times. As Telecom
penetration is increasing and even approaching saturation, the focus of Telecom Business Intelligence is
shifting from customer acquisition to customer retention. Acquiring new customers is much more costly
than retaining existing ones according to numerous studies. Thus customer attrition analysis and churn
prediction models have become an essential part of BI. At present very few variables like days of silence,
decreasing revenue trend and days of balance left are considered as earmarks for churn. However,
standard practices involve analysis of data captured during individual customer contacts at various touch
points and these data are further coupled with the billing information. The resultant data set is then
associated with customers who have switched to analyze the possible reasons behind the decision.

Even the usual methods of churn prediction model have some limitations. Traditional methods continue to
miss a key dimension to better targeting and treatment which is to gain insight into the relationships
customers have with other people in their (call) network. This is where SNA is called into action. SNA is
a fast emerging discipline for predicting and influencing consumer behavior. It focuses on how
relationships are built and how they contribute to influencing individuals within social groups.

Long Road Ahead:

Taking into consideration the present practices, methods and available data sources, it can be said newly
formed AA has quite a long way to travel. Implementation of the best practices and standard methods,
like SNA or Predictive models, need extensive expertise as well as system support. No matter how, the
success of AA or, broadly speaking, the success of BI will largely determine the level of domination GP
will enjoy over the market in the coming times.