CPNI: Coping With Compliance

Like most carriers, you probably rely on customer proprietary network information (CPNI) to understand customer needs, develop targeted services and programs, and optimize networks. After all, CPNI can tell you a lot about quality of service, and can direct you toward service improvements or technical options. This information is vital to developing strong customer-retention programs.

But that paradigm is changing. The FCC has practically eliminated this primary source of information. Last summer, it ruled that carriers could use CPNI data only to directly service a customer's existing account. You must have customer consent to use the information for anything else.

THE RULESThe FCC defines CPNI as network and billing information such as usage information, dropped-call information and customer-service calls. It does not include customer-list information such as name, address and phone number. The rules apply to all telecom carriers, including local, long-distance and wireless.

There are distinctions within each service category.

For example, you can use CPNI to market a new type of handset to a customer if you sold him his current handset. Or you can use CPNI to offer users a better price plan based on their current usage. You don't need customer consent for these approaches.

Beyond that, however, you can use CPNI only with the customer's permission. If network data indicates a wireless customer has poor handset quality and has made many calls to customer service but he purchased the handset from another carrier, you cannot use this information to sell him a new service or product.

If you offer multiple phone services such as long distance and wireless, you cannot use CPNI to sell different services. For example, if your current wireless customer uses another long-distance provider, you cannot use CPNI to sell that customer your long-distance service.

Regardless of service category, the rulings also prohibit you from using subscribers' billing characteristics to promote incentives to win back business. This means you no longer can reward high-billing customers with more valuable incentives than lower-billing customers.

If you plan to use CPNI beyond the services you supply currently, you must follow a careful process to protect the customer's privacy and ensure your compliance. You must document every step of this process and keep records of the customer permission for at least one year.

Before requesting permission to use CPNI, you must give customers written or oral notification of their rights. Once this is complete, you can request the customer's permission in written, oral or electronic format. You can obtain permission during incoming calls to customer-service representatives or during outbound telemarketing campaigns.

Once you receive permission, it remains in effect until the customer revokes it. You also must establish a supervisory process for outbound marketing situations.

NOW WHAT?So what do you do about these restrictions? One option is to fight the rulings. Many carriers and organizations such as CTIA have registered protests against the new limits. CTIA argued that the FCC is misinterpreting Section 222 of the Telecommunications Act. The section seeks to achieve a balance between marketing and customer privacy, but, CTIA argued that the FCC's narrow reading of this provision now prevents carriers from offering better services.

According to CTIA President & CEO Tom Wheeler: "Every other competitive business has the right to use its customer lists to offer better or more inexpensive service. (Eliminating) CPNI is to deny wireless operators the tools with which to compete. It is anti-competitive and defies common sense."

On Dec. 11, CTIA filed comments with the FCC claiming it has set rules that discriminate between new and existing wireless carriers. CTIA pointed out that the FCC is requiring new systems to meet the rules, but existing systems are not required to do the same.

As the FCC considers these protests, you still must operate and retain customers according to the regulations. The key ingredient to making this work is putting customer approval to good use. Whether a requirement or not, this is one step that has positive implications. Even without CPNI rulings, you should be looking for ways to create a better dialogue with customers, finding out if and how they prefer to be contacted.

TOOLS TO HELPOnce you have approval to use CPNI, it is important to use the data effectively. Employing a software solution that turns the data into valuable customer information is the next step in creating a competitive advantage.

You can build customer knowledge into the decision-making process with applications that use CPNI as input. Such applications provide a complete picture of each customer by combining geo-demographic and lifestyle information with CPNI, including usage and mobility patterns as well as blocked, unanswered and dropped call data.

You should update and refine this information consistently and automatically. Then, you can analyze and transform comprehensive and up-to-date information into true customer knowledge, allowing you to make business decisions, optimize networks, and design new products and services based on how customers are using and experiencing your services.

With this knowledge, you can segment customers and provide tailored solutions for their needs, offering customized services, which are critical in maintaining strong customer relationships. When you combine CPNI with customer demographics, you can better identify how each customer and prospective customer could benefit from your entire service offering.

For example, you can sell voice mail, paging services or a handset with caller-ID features to a customer whose call data indicates many unanswered calls. You can create campaigns for solution sets based on the way customers actually use and experience service.

With CPNI approval, you also can determine the best means of communicating with each customer. By compiling detailed information on customer patterns and preferences, you can use marketing resources more efficiently. This results in more effective marketing resources and targeted promotional messages.

Integrating the nature and frequency of all customer communications provides valuable feedback for strategic business decisions. You can measure the effectiveness of marketing campaigns instantly so that you can tailor programs based on actual customer response and behavior.

Applications can help you manage and maintain the CPNI approval process through an integrated view of each customer and real-time tracking information. By keeping track of customer approvals, you can avoid over-contacting a customer about CPNI and gather information about effective contact methods.

You also can track CPNI approval rates. Because only those customers who give CPNI approval are available for specific marketing efforts, tracking the number of approvals tells you the percentage of a market that will receive specific promotions. Compiling customer contacts into one application also allows you to meet the FCC's new documentation requirement.

THE CHALLENGEAlthough you are limited in how you can use CPNI, you still can use it to improve your service offerings. Regardless of the difficulties it brings, all carriers must comply with the regulations. In addition, you should find tools that take advantage of all approved CPNI uses. Software solutions can provide a complete picture of all customers who have granted CPNI approval. They can track and store CPNI-related information so that you still can use it effectively. These steps can help you compete and comply at the same time.