Using social network analysis to predict churn is a hot topic at Analytics2011 and The Premier Business Leadership Series. Bart Baesens presented the academic perspective on the subject at Analytics2011, while down the hall one telco executive shared the story of his company’s efforts to apply the same technology to retain and grow its customer base.
Fortunately, T-Mobile has a forward-thinking CEO that supports the exploration of new software technologies to keep T-Mobile’s position healthy. While T-Mobile has been a long-term SAS shop in the areas of finance and marketing, Dr. Weigelt’s team last year began a new journey to explore and pilot SAS Customer Link Analytics to retain and grow T-Mobile’s customer base.
In the communications world, Customer Link Analytics identifies relationships among customers and their calling communities. The analysis helps identify “influencers” and “followers,” which drives marketing campaigns to both core T-Mobile customers and their calling communities. Dr. Weigelt’s team discovered the “virality effect:” if an influencer stays with T-Mobile, customer churn drops by 25 percent.
The journey has not been without its bumps: Weigelt says the challenges of big data haunt his team like they do many companies today and the complexity of the analysis requires patience. “SAS provided us with the confidence to deal with the large data. We’re working with roughly one billion records, and other vendors would probably not be able to deal with this,” Dr. Weigelt says. He has ideas for how the software can continue to evolve to facilitate steps that are required today. “My advice? Take customer link analysis slowly—don’t expect immediate payback. There is an initial research investment and significant system commitments, but the potential benefits are very, very large.”
T-Mobile’s marketing department is currently executing the first round of campaigns based on the findings from Customer Link Analytics. “It has definitely allowed us to be more focused in our marketing efforts,” Dr. Weigelt says.
