Money for Nothing

Dr. Stefan Schwarz

Director Telecommunication, Media &

Entertainment, Teradata GmbH

“On average Telcos spend approx. 27% of their overall opex on customer acquisition & retention!

Source: CapGemini

CapGemini TME Lab Analysis based on operator annual reports and industry reports

Is this still the right thing to do?

Subsidy Retail

Commission

Post-pay

Some telcos try to act with brute force …

But perhaps the axe is not the best tool …

Starting in the late 1880s, the Swiss Army Knife was used to open canned food and disassemble the Swiss service rifle, the Schmidt-Rubin M1889, which required a screwdriver for assembly.

DISCOVERY PLATFORM

INTEGRATED DATA WAREHOUSE

ERP

SCM

CRM

Images

Audio

and

Video

Machin

e

Logs

Text

Web

and

Social

SOURCES

DATA

PLATFORM

Business Intelligence

Predictive Analytics

Operational Intelligence

Data Discovery

Path, graph, time-series analysis

Pattern Detection

Fast Data Loading & Availability

Filtering & Processing

Deep History: Online

Archival

ACCESS MANAGE MOVE

UNIFIED DATA ARCHITECTURE Business Conceptual View

Fast-Fail Hypothesis Testing

Teradata Customer Management Cases

RETENTION VALUE MGMT AQUISITIION

Integrated Comm.,

Price Promo & Subs

Avoiding churn

inducing upsell

Avoid Useless

retention

Low Affinity Products

Under-estimated

Usage Elasticity

Insufficient Retention

Manual Portfolio Mgmt.

Product Cannibi-lization

CEM based retention

Integrated Comm.,

Price Promo & Subs

Avoiding churn

inducing upsell

Avoid Useless

retention

Use Case Example 1: Avoiding useless retention

Example 1: Churn inducing upselling

Avoid useless retention

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

0

2000

4000

6000

8000

10000

12000

10% 14% 18% 22% 26% 30% 34% >38%

Nu

mb

er

of

cust

om

ers

Saving potential actual product compared to competition

Ch

urn

rate

Price independent churn

Price related churn

Use Case Example 2: Avoid churn inducing upsell activity

Avoid churn inducing upsell activity

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

0

2000

4000

6000

8000

10000

12000

10% 14% 18% 22% 26% 30% 34% >38%

Nu

mb

er

of

cust

om

ers

Saving potential actual product compared to competition

Ch

urn

rate

Price independent churn

Price related churn

Use Case Example 3: Acquiring customers for the right/best price

Is your BI equipped to help optimizing acquisition

to report all acquisition costs as direct cost

adhoc

to report all acquisition costs on a

customer individual level

to forecast all acquisition cost across multi-

dimensions (channel/POS, tariff, handset,

customer segment) very precisely

to predict individual customer value

precisely for 24 months forward looking

Does your BI environment provide the ability?

Value of customer management opportunities

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0%

Useless Retention

Underestimated

Usage Elasticity

Product

Cannibalization

Integrated Subs

& Commisions Insufficient Retention

Manual Portfolio

Maintenance

Low Affinity

Upselling Offer

Billing errors

Overall potential calculates as 7,1% of total company revenue

Saving

potential [% of

opportunity

value]

Value of opportunity [% of company renue]

Summary & Outlook

• The value opportunities in

customer management are

still huge (perhaps bigger than

ever)

• Infrastructure/tools, use case

definitions & methodologies

exists and are proven.

• It is time to meet the challenge

and unlock the huge untapped

value in customer

management

Dr. Stefan Schwarz

Director Industry Consulting Telco,

Media & Entertainment

TERADATA

M: +49-173-74-88381

stefan.schwarz@teradata.com

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STEFAN.SCHWARZ@teradata.com

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