CHAPTER 9
Case Study of a Retention Strategy
The purpose of presenting this case study is to show how customer analytics looks when it is being implemented for real. The purpose of this chapter is to make it clear that customer analytics really is less about using the most advanced algorithms and optimized technical solutions and more about coming up with some effective and efficient ways of dealing with your customer-centric challenges, which very often can be quite the opposite.
I considered making this chapter the first one in the book, as I always start with this case study when I train classes in statistics, data-mining, and the use of software. Since this case study shows the power of customer analytics, it can turn a company around in a matter of months.
In 2004, a Danish telecom provider realized a loss of approximately $10 million in a market with declining rates. This loss had also resulted in changes in the top leadership structure, and the company had also just been sold to a new foreign company owner. In the summer of 2004, another redundancy round was announced along with another change of chief executive officers (CEOs).
Behind all these numbers were some very high churn figures. In one month the company had lost approximately 14% of its private mobile postpaid customers due to a poorly planned rate increase forced through by the previous company owners. In general, however, the churn levels were between 5% and 7% per month in 2003 and 2004. The new owner of ...
