Customer churn can give mobile network operators heartburn. If only they had a tool to predict the churn and do something about it! Prithvi Information Solutions Limited, a Hyderabad-based software consulting company, claims it has one such solution.
Christened 'Unchurn', the company says its predictive analytics algorithm could help network operators identify reasons for churn and build decision models to tackle these. Unchurn, for which Prithvi has filed for a patent, uses artificial intelligence and analyses customers' billing details, call usage, demographics information and customers' propensity to switch loyalties.
All an operator needs to do is provide data and demographics to Prithvi. The company's algorithm figures the customers' usage patterns and gives the operator a list of customers who are expected to leave the services. Prithvi analyses the reasons for the churn by mapping the clusters of customers with the cause of the churn. This helps companies understand which segments of customers are most sensitive to which aspects of churn. Prithvi claims Unchurn could save up to 30 per cent on revenue loss and the cost of acquiring new customers.
“We see customer churn from three different perspectives---peer pull-driven (the peers that a customer is talking to and are they on a different network), network pull-driven (the operator's performance in a network) and competition pull-driven (the competition, the brand and the campaigns they have). UnChurn would help telecom operators identify customers who are likely to leave and understand the reason for changing their operators,” says Nitin Vyakaranam, head (global marketing and alliances) of the over $340-million company.
Vyakaranam says India is a market in which most people let go of their numbers and go for a new one. Hence, mobile number portability (MNP) is becoming a catalyst for churn. According to him, campaigns being run by operators to retain customers are adhoc, ineffective and inefficient. “The impact of MNP has been very high and accounts for 15 per cent of the churn happening in India. The average churn in the country is around three per cent every month. We expect globally, telecom operators lose over $10 billion because of churn on an annual basis, and it would be higher than Rs 6,000 crore in India this year alone,” he says.
“If service providers spend Rs 500 to acquire a customer and then record revenue of Rs 24 from him, how much time would it take for them to actually break even? It is now more important for telecom companies to retain the right customers, as it is more cost-efficient for them than acquiring new ones. This is where Unchurn would help—in identifying who would churn and why,” adds Vyakaranam.
Prithvi had already carried out a pilot project for AT&T in Pittsburgh in the US and revealed there was a 90 per cent probability of about 10 per cent of the population in that area leaving it. “Initially, we want to try Unchurn in India and West Asia. We are talking to multiple very-large carriers and are close to signing one operator in India for Unchurn. We would like to close at least two carriers (circle-wise, $1-million deals) by the end of this financial year. Unchurn for us is a differentiator and allows us an entry into all the operators in the world,” he says.