In Action

Habaca Help Ireland's Leading Mobile Phone Provider Understand and Retain Customers

Habaca Help Ireland's Leading Mobile Phone Provider Understand and Retain Customers

The Company

Vodafone(Irl), Ireland's leading mobile phone operator, has a customer base of over 1.5 million people and a total of 1650 employees. Vodafone holds 59% of the market share in a country where 68% of the population own a mobile phone. Interim results published in September 2000 show that revenue grew by 49.3% to €327m in the half year to 30th September 2000 from €219m (to September 1999).

The growth in the company's results is reflected in their commitment to providing the right products to the right people. Every customer is greatly valued in the highly competitive Irish mobile phone market and analytical Data Mining is a key factor in Vodafone's customer retention and prospecting strategy.

As Mr. Anthony O'Neill, Customer Insights Manager explains, "Vodafone's mission is to make mobiles affordable and attractive for all and to be known as the company who does the right things well. With proper data analysis, we can devise the right Vodafone product, tariff and service to suit each individual customer." Analytical customer relationship marketing using Clementine™ has helped Vodafone to know who their customers are and what they require, both now and in the future.

Vodafone's corporate philosophy of 'Coverage, Care and Choice' underpins everything that it does and last year Vodafone officially opened a €7.5 million dedicated customer care centre in Dundalk. Data gathered by Vodafone is used to understand their customers, to help build loyalty and to maximise customers' lifetime value.

Building Customer Loyalty and Maximising Lifetime Value

The cost of churn (losing customers) is the one of the most critical issues in telecommunications. Vodafone's challenge was to tackle churn using data analysis. This would allow them to understand their customers better and to customise their interactions with them in order to make Vodafone a company customers wish to stay with.

In order to improve customer relationships and to maintain its strong competitive advantage, Vodafone established a customer data analysis team headed by Mr. O'Neill. The projects' main aim is to minimise churn using Data Mining and data analysis.

Habaca consultants were recruited to help Vodafone meet the following analytic objectives;

1. Segment and profile customers.

2. Provide an interpretation of churn in the Prepaid sector.

3. Predict churn by particular vulnerable profiles across the customer base.

The Project

A critical factor for Vodafone in building customer loyalty is the use of customer intelligence obtained from data gathered by the company.Habaca's consultants, using SPSS Clementine™ data mining software and the CRISP-DM process model, have helped identify key information in Vodafone's data allowing them to better understand and predict their customers' requirements.

Habaca's data analysis skills aided Vodafone in interpreting their customers in terms of certain groups. These customers were segmented on the basis of their use of Vodafone's services.

This form of segmentation fed into an original approach to prepaid churn. As these customers do not receive bills or have contracts with the company, it is a common problem in telecommunications as to how to tell when such a customer has churned. Habaca's consultants provided Vodafone with an innovative method of customer understanding that acts as an indicator of churn in pre-paid customers.

The main objective of Vodafone's use of Clementine™ Data Mining software is to predict what are the factors contributing to individuals finishing their time with Vodafone. Managing churn allows Vodafone to target campaigns and interactions with their customers to ensure they are treated in the most suitable way according to their needs.

According to Mr. O'Neill, "Data Mining's most fundamental advantage is that one does not get blinded by a mass of data. Most data collected in companies is not collected with a particular purpose in mind. Clementine™ allows you to try out lots of ideas quickly and eliminate irrelevant ones from consideration".

The Benefits

Vodafone used the results of predictive Data Mining to make strategic marketing decisions to minimise churn and to implement targeted promotional campaigns and customer interactions. The ability to predict the future behaviour of its customer base allowed Vodafone to develop long-term CRM strategies. On-going analysis of the data available to them gives Vodafone an up to the minute understanding the different customer segments and requirements using predictive churn models.

Mr. O'Neill explains, "Habaca helped us to identify key information to allow us to make strategic data-based decisions. Our billing and customer care data is now a key strength for Vodafone. Marketing opportunities are discovered and actioned as opposed to inert data lying in storage".

If a customer does leave, Vodafone uses data analysis to understand why and to identify the features leading to churn. The ultimate objective of this understanding is to be proactive in implementing change that will encourage other customers to stay with the company.

As Mr. O'Neill explains, "The power of the Clementine™ software has allowed us to analyse the vast amount of customer data we have stored in-house. Without Data Mining, the most valuable pieces of customer information can pass unnoticed. Without the power of Clementine™, coupled with the expertise of Habaca, it is unlikely that such actionable results could have been accessed so quickly and effectively.

"Habaca's industry expertise meant that we could leverage their experience. This meant that we could find industry best practices quicker".

Asked to sum up the data analysis project Mr. O'Neill is emphatic "Data Mining using Clementine™ has allowed us to build closer relationships with our customers. We now have a clearer picture of who our customers are and what are their needs. For that reason alone I would say the projects in conjunction with Habaca have been a success."

Why Habaca?

Habaca's ability to provide a team of data mining experts allowed Vodafone to get the project moving and simultaneously implement training for staff. The industry knowledge coupled with their expertise in data mining gave Vodafone confidence that the project would be delivered on time and to budget. "Having a dedicated data analysis project team allowed us to really focus on the deliverables rather than getting bogged down in the technology" explains O'Neill.

Habaca's expertise in implementing the SPSS Clementine™ software was also an important factor. Clementine™ is one of the world's leading analytical CRM packages and has been successfully installed in hundreds of telecommunications companies world-wide. It has state of the art data analysis features and is highly flexible and intuitive. This allowed Vodafone to quickly develop different data mining models with which to segment their data.

"Having investigated a number of data mining companies, we decided that Habaca was best positioned to deliver everything we were looking for" concluded O'Neill.