[February 26, 2003]

Teradata Announces New Customer Survival Analysis Solution For Telcos

Teradata announced the introduction of its customer Survival Analysis solution that helps telecommunications operators understand how long they can expect to keep a customer. The analytical techniques employed also provide operators insight into the types of action needed to address the possible "time to defection" depending on the customer's business value.

"Understanding if and when your customers will churn is nothing new in the industry. We applied knowledge gained in the medical and healthcare industry regarding life expectancy of patients as a basis for customer modeling based on behavioral patterns, which is especially suitable in the pre-pay market," said Judy Bayer, customer relationship management (CRM) and analytics practice partner at Teradata. "When operators use this method to develop customer lifetime expectations and combine it with the Teradata solution for analyzing customer profitability, they have the required elements for calculating lifetime value. This information enables operators to take action on an individual basis depending on how valuable the customer is to their strategic plans."

Survival analysis enables operators to identify the timing of "risky behavior patterns" that lead to reduced survival probability in the future. By identifying the timing, a decision can be made to select the appropriate marketing action and its associated cost. For instance if a highly valuable customer is expected to churn the following month, then aggressive action to retain the customer, such as a call from an experienced sales representative, is warranted (a high-cost marketing action). If the customer is projected to defect in six months, then the telecommunications operator can try less expensive alternatives first, such as a targeted direct-mail campaign. Conversely, the Survival Analysis solution also identifies behavioral patterns that can lead to a higher "life expectancy" for customers.

Survival Analysis forms part of the Teradata solutions for telco operators and is integrated with existing Customer Value Management and Teradata CRM functionality. Teradata data-warehousing customers in the telco market include 10 of the 13 largest operators globally.

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