Leading telecom operators understand that economic value is no longer driven by the acquisition of new customers, but rather, it lies within their existing customer base. Realizing this potential can be a challenge, especially under challenging market conditions.
For one top-notch integrated telecom operator, customer value management (CVM) moved to the top of their agenda almost overnight. The telco had been aware for some time that there would be convergence in fixed mobile. However, the regional consolidation of two major operators, combined with a sudden change in the regulatory situation, created an immediate and unexpected shift in competitor dynamics.
The regional asymmetry in the telco’s infrastructure left it exposed in this new environment. It quickly became clear that it required greater agility in CVM — and it needed this capability urgently.
Orchestra and the Next Best Action engine serving to manage customer base
Our team at Oliver Wyman refers to the telco’s tailored technological and organizational solution as Orchestra. This solution hosts customer-level data marts and machine learning models, combined with a Next Best Action (NBA) engine.
The NBA engine leverages advanced analytics to drive targeted upsell and cross-sell through all channels and across its entire customer base. The engine is based on cutting-edge, machine-learning predictive models that include churn and contactability for the entire postpaid base. The analytics are based on machine-learning algorithms and operate at a per-customer level to provide agents with the best possible offers.
Embedding Orchestra within the organization ensures a holistic operational change
The new end-to-end customer value management (CVM) solution needed to be embedded within the telco's organization to ensure the optimal deployment of its NBA engine. This required a new organizational approach.
The organizational transformation plan included a new operations and governance model. The plan defined the actions to be targeted for each of the channels and included bringing together sales and customer care. A new managerial position was created with overall responsibility for end-to-end CVM of the customer base. This position was to be supported by an agile team, including business intelligence, marketing, channel management and control, along with a suite of advanced CRM tools.
Orchestra offers significant revenue growth and immediate impact
The telcos' fully automatized NBA engine was up and running within four months. The new end-to-end approach to proactive retention and net value creation resulted in a 22% increase in the average revenue per user over the telcos' previous approach and a 39% improvement in revenues. Call centers doubled both the rate of their mobile upsell conversation and that for switching from ADSL to fiber in the home (FTTH). Cross-sell from FTTH to mobile increased by 2.2 times.
Critically, the rapid deployment of Orchestra and its embedded NBA engine produced immediate impact. The telco's new approach not only addressed the immediate challenges resulting from the changed market conditions within the region but also equipped it to gain share over the longer term.