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Retention Case Studies

How Telefonica Ireland Uses Business Intelligence To Reduce Churn

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O2 Ireland Prepay mobile phones Bill Pay mobile phones and mobile broadband
⁠
⁠
Before 2007, O2 Ireland, part of
Telefonica Europe
⁠
, had a ton of disparate data and very little insight as to what it all meant. Yet in the business of pre-paid SIM cards, it can be hard to know which customers to focus retention efforts on. It’s not uncommon for a customer to buy a SIM card, use it for a business trip, and then leave the country. Yet focusing retention efforts on these customers would be a poor investment.

The Research

To better understand customer behavior, the company invested in
Cognos Business Intelligence
⁠
(BI) tools and a Teradata data warehouse. This unified system is a huge improvement over the earlier infrastructure, which was both expensive and slow. Every day, data from over 130 processes are collected in O2’s data warehouse, including the entire billing and customer relationship management system.
Analysis of the company’s data revealed that only about 65% of pre-paid SIM customers have an ongoing relationship with O2 (as opposed to the traveling businessman in the scenario above).
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cognos bi dashboard
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⁠
Sample Screenshot, not O2 Data

The Execution

Business intelligence is now part of the company culture at O2, informing everything from location-based marketing efforts to everyday decision making. O2’s Peter McKenna explains, “Given their array of behaviors, it doesn’t make sense to invest in all customers in the same way. We want to invest in the customers we can influence and the customers who are really engaging with us.”

Why Did This Happen?

Once the company had all their data in one place, some inexplicable user behavior began to make a lot more sense. With such distinctly different segments of users, it became clear that targeting each and every one with retention efforts would be a misstep.

Actionable Advice

If you’re currently unable to take a holistic look at your data, the time and expense required to unify it will most likely be worth the insights you’ll gain.
Understanding the various segments within your user base will prevent you from wasting your energy and marketing budget on unqualified users who are destined to churn, as well as give you insight into better opportunities for
growth
⁠
.

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Source
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