Case study: eircom is investing in analytics to improve customer experience and drive growth

29 August 2012
Jessica Figueras and Johanne Mayer

eircom, Irelands largest telecoms operator, has decided to make significant investment in analytics improve customer experience and drive growth. This investment will encompass new technology infrastructure as well as skills and human resources. eircom has invested in new campaign management and data mining capability, and built a team of specialist individuals who offer a range of data science skills. Analytics is unlocking value in new ways through a wide portfolio of applications such as pathway analytics and text analytics. The company also has a long term goal of a single data warehouse serving all departments. In the customer domain, analytics is intended to support multiple use cases from campaign management to competitive analysis, unlocking opportunities for growth and enabling the company to better understand the needs and behaviour of its customers.

eircoms success with analytics depends on several factors

eircoms approach to analytics in the customer domain is strongly based on Net Promoter Scores (NPS). NPS is a measure of the number of advocates a company (or website) has who would recommend it compared with the number of detractors. Measurements are taken through surveys and questionnaires. An NPS score is the weighted resulted of detractors to advocates. The company is doing some innovative things in this area, such as text mining on survey responses and linking NPS to predictive models. eircom is also following the wider trend away from fragmentation in technology infrastructure to support analytics. A key objective for eircoms analytics team is to encourage data-driven decisions. There are two factors that are critical for eircoms success with analytics. The company needs to build a new skills base in analytics, in the face of strong competition in its home city of Dublin. eircom has built a team of specialist individuals who offer a range of data science skills from data mining, to data structures and BI specialism. The company needs to ensure deep collaboration between its fixed and mobile businesses.

eircom will use analytics to better understand its customers and competitors, and predict future trends
eircoms long-term vision for analytics is to build a cross-organisation view of the customer and to use analytics for point differentiation in the marketplace. The company has both fixed and mobile operations, which means focusing on both individuals and households. eircom is seeking to understand the customer journey as well as the customer experience across a wide variety of business process areas, and how these experiences are related to measureable business outcomes. Some of eircoms specific areas of focus for the use of analytics are as follows.

Analysys Mason Limited 2012

29 August 2012

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Advanced analytics: Churn prediction, cross-selling models, campaign management. Brand sentiment analysis: In particular, using social media channels as a source of intelligence. Understanding what its customers are saying in the online realm for example, whether customers mention eircom in blogs or on Twitter, or recommend it to their friends. Pathway analytics: To assess the effect of customer interventions on customer behaviour over time. Customer segmentation: To improve customer retention and generate profitable growth. Competitor analysis: Building detailed competitor profiles, which can help eircom to understand its competitors activities. Trend analysis: Identifying lead indicators, such as ARPU trends, which may help to predict future ARPU. This is important because ARPUs for fixed and mobile services are declining across Ireland.

Churn and campaign management

eircom is using advanced analytics to identify the customer trouble spots that have the strongest influence on NPS, and a proven link to churn. It has already identified several of these, including billing enquiries and bundle changes. Customer communication has been a particular area of interest, because eircom discovered a difference between customer perceptions of effective communication, and the information it was gathering from its customer systems. For example, the company demonstrated an improvement to NPS simply by informing customers by text message about engineer appointments. To establish the NPS, eircom sends surveys and questionnaires and may also analyse conversations with customer care attendants. eircom is using a new data mining tool to analyse the large volumes of unstructured data from customer feedback in order to better understand its customers perception of the company. eircom has started to gain value from pathway analytics. This allows the company to track the results from investment decisions such as customer upgrading, to understand the impact of onboarding a customer appropriately and to measure the impact that different journeys through customer care has on NPS. This requires both a longitudinal view on individual customer journeys and data mining software that can discriminate the effect that different journeys can have on predefined outcomes.

Organisation design and skills

An increased corporate commitment to analytics in financial terms means that eircom must develop a strategic overview of analytics. This will encompass technology specification and procurement, development of an appropriate data model and data governance. eircom has committed to build up analytics capabilities in-house rather than outsourcing work to external agencies, as it has previously done. This has enabled it to extend its analytics activities by pooling skills across the business, making use of insights across brands and giving its analysts new opportunities. Dublin is an emerging centre of excellence for analytics, with an academic centre at Dublin Institute of Technology, competency centres run by Accenture and IBM, several niche commercial firms, and specialist teams at Facebook and Google, which have major European operations in Dublin. This means that competition for talent has been intense, and recruitment has been a challenge for eircom.

Analysys Mason Limited 2012

29 August 2012

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eircom is aiming for responsive, scientific and comprehensive analytics

An end to technology fragmentation
eircom has multiple data warehouses and data marts serving its fixed and mobile businesses, which have grown up organically. This fragmentation is a key reason why eircom has not yet been able to track its customers across multiple business areas. eircom has already upgraded some of its systems to support analytics for example, it has a new campaign management system with supporting data marts, and a new data mining platform (IBMs SPSS software).

Fast and responsive infrastructure

eircom is looking for greater speed and lower latency in its new infrastructure. This is important in supporting churn prediction and prevention, where triggers can enable the business to take action at an individual customer level. A churn prediction alert is a warning that a customer may be about to churn, based on insights gained via analytics. For example, the customer might change their usage behaviour or have an interaction with the contact centre that the system recognises as a red flag. The new campaign management system is already triggering 300400 alerts every week, which enables eircoms team to act on the information straight away. While realtime data may become a need in the future it is not the focus now. Achieving near real-time analytics would be a significant win in the short term.

A more scientific approach to analytics

eircom is adopting a more scientific approach to the use of insights generated by analytics, and will use analytics to make business decisions based on direct evidence. There is a view at eircom that a key strength of the NPS framework is its granularity and measurability, which enables eircom to be rigorous in testing the outcome of innovations and improvements to customer-facing processes. eircom is also using a controlled trial approach, by testing innovations on half of its customer base (the trial group) and then comparing the results with the other half (the control group).

Success to date
One of the areas in which eircom has used analytics is in understanding customer behaviours so that new propositions can be appropriately constructed. Specifically, Meteor (the eircom-owned mobile operator) used profiling techniques to understand the different top-up and usage patterns within its prepaid base. Traditionally, prepaid promotions in the Irish market had been pitched at a EUR20 entry level. This profiling enabled the company to innovate by developing new offers to underserved market segments at EUR10 and EUR5 top-up levels.

About eircom
eircom is the largest telecoms operator in Ireland, with both fixed and mobile services. It is the incumbent fixed operator and owns Meteor, the third-largest mobile operator, as well as eMobile. The company was privatised in 1999 and returned to the stock market in 2004. Its position as the largest PSTN provider has exposed eircom to some of the main trends in the Irish market: fixed mobile substitution, declining fixed voice subscriptions and call volumes, and the rapid growth of mobile and cable broadband as alternatives to DSL. Mobile ARPUs are also declining.

Analysys Mason Limited 2012

29 August 2012

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The company has faced a serious debt crisis in recent years, leading ultimately to the biggest examinership in the history of the Irish Republic. In June 2012 it successfully emerged from examinership with new shareholders who were previously the senior lenders. eircoms five-year business plan envisages the loss of 1 000 jobs. However, funds have also been ring-fenced for investment, including a plan to roll out high-speed broadband as well as IPTV and entertainment services to nearly two-thirds of Irelands households.

Analysys Mason Limited 2012

29 August 2012