AI Systems Help Telcos Fight Customer Churn

By Evan Dashevsky, Senior Writer
January 30, 2019 • 2 minute read

Whenever a telco loses a customer, they lose a potential revenue source that could extend years. Combatting customer churn is a constant priority for the telco industry, and providers are increasingly turning to AI for help.

Customer churn is a challenge within any industry. However, it is particularly important within the subscription-based telecommunications industry, where each customer represents potential revenue that can extend for years, if not decades.

According to industry watchers, modern telcos spend several hundreds of dollars to acquire a new customer. According to one industry observer, “15-20% of services of revenues [are spent] on acquisition and retention, compared with the average capex spend on infrastructure (networks and IT) of just 15% of revenue.” That means many telcos spend just as much if not more combatting customer churn as they do on maintaining and improving their actual products and services. It’s not a stable or sustainable model for future growth, particularly as the advent of 5G wireless networks is poised to fundamentally change the industry. Increasingly, providers are turning to Artificial Intelligence (AI) to power more intelligent customer retention and acquisition efforts.

Let’s Get Analytical

By the nature of their business, telcos have access to a plethora of customer data. All this data helps them understand their customers at a granular level. This level of detail allows providers to engage in predictive analytics to identify customer segments most likely to jump ship to a competitor (ideally before they actually do so).

Not only is AI necessary to translate all this data into strategy, but it can be used to launch proactive marketing/communication campaigns to reach out to current and potential customers. Digital colleagues like Amelia are uniquely qualified to deliver highly personalized marketing experiences at scale. Not only can this technology be a key part of a company’s user engagement strategy, but her real-time analytics and A/B testing can help optimize marketing campaigns moving forward. However, analytics isn’t the only way that AI can assist telcos with churn.

Mitigating Pain Points

A report from analyst firm Analysys Mason found that while price was the top reason for churn among mobile small and medium enterprise (SME) customers, it was outpaced by “data rates or bandwidth” for fixed service SME plans; customer service was also among the top three decision triggers. Among large enterprises, customer service was considered the top pain point within all categories.

As telcos race to offer more services to more customers, it can often come at the expense of customer service. Fortunately, AI platforms such as Amelia has proven to be particularly effective at improving customer experiences at scale, even as new products and services are added apace. AI can automate a telco’s routine, high-volume customer support issues – often far quicker than a human agent. When AI takes over these roles, experienced human agents are no longer bogged down with repetitive customer requests, and can spend time addressing complex or unique customer needs.

Beyond customer support and experience, AI can be used for a variety of other use cases according to research firm Tractica that can impact operations, go-to-market activities, revenue generation and more, including: network operations monitoring and management, predictive maintenance, fraud mitigation, cybersecurity, and intelligent customer relationship management (CRM) systems.

Mitigating churn is a priority for telcos to remain viable in a complex, evolving and increasingly competitive marketplace. The companies that embrace AI’s ability to scale, analyze data, provide enhanced customer experiences as part of their customer retention-and-acquisition strategy will be the ones to thrive in the near-term and in the coming 5G era.


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