All in the Family

If Norman Rockwell were alive today, he might paint a scene like this for the Saturday Evening Post: Mom is talking on a wireless phone while her daughter uses the landline. Dad relaxes on the sofa watching cable TV as his son surfs the Internet.

You can see this particular scene if you catch the CBIS corporate brochure. The company, like most vendors involved in customer service, customer care, billing, churn reduction and fraud prevention, recognizes that convergence is here. Carriers that don't offer multiple services will be left behind, as will revenue-management companies that don't help them do it, said Mark Rohde, CBIS's senior vice president of sales and marketing.

Pamela Reeve, Lightbridge president & CEO, agreed.

"After the 1996 Telecom Reform Act, real competition exists for the first time," she said. "Carriers are offering new services through new channels in new markets. The challenges are to get to market with new converged services quickly and effectively, acquire low-risk customers and prevent them from going to another carrier."

A Happy Home Thanks to deregulation, markets that once had only two competitors now have up to nine. The trick you must master is making your subscribers want to stay. Every year sophisticated products emerge to help you reduce churn.

Bill Taliaferro, Corsair Communications director of product marketing, said up to one-third of churn is due to poor call quality. Up to half of that churn is due to poor subscriber equipment. PhoneCheck is Corsair's wireless phone performance monitor that tracks the worst performing phones and your highest value subscribers separately.

"Customers don't differentiate between bad phones and bad service," Taliaferro said. "When they can't hear, they assume it's the carrier's fault and may churn to someone else."

A case study by Corsair showed that PhoneCheck reduces churn by 61%. The test showed that a 61% churn reduction among 10,000 subscribers saves 306 subscribers over the course of a year. At an industry average $150 per month in usage for high-value subscribers, this churn reduction is worth $580,000 in revenue in the first year.

PhoneCheck works with Corsair's PhonePrint cellular- fraud-prevention system to collect signals during normal usage to help spot problems with faulty and out-of-spec phones. Each phone is rated between zero (healthy) and 100 (terminal). When a phone begins to go bad, the customer's name shows up in red on the carrier's monitor, alerting it to call the customer and suggest that he or she bring the phone in for service.

"Until this device was introduced, the only way to obtain performance information was to send technicians to the customer or to bring the customer into your service center," Taliaferro said. "Customers are impressed that you even know their phone is bad and that you care enough to call them."

James Airy, Metapath Software vice president of marketing, agreed that a pro-active approach to customer service could reduce churn significantly. At Wireless '98, Metapath demonstrated Ceos (Communications Enterprise Operating System) and Ceer, which are designed to help you take these steps. Ceos gives you real-time access to network and customer data for immediate distribution to a variety of internal applications including billing, marketing, sales, fraud management, network management, performance analysis systems and customer service. Within seconds of call termination, Ceos collects and delivers call details, alarm/fault messages or traffic reports in real time. Then, Ceer translates the data into behavioral knowledge. It records dropped calls, mobility patterns and demographic data. Armed with this information, you can target specific customers with tailored programs.

For example, you can capture cell-site information for customers and develop mobility patterns for them. You will be able to see if customers are experiencing many dropped calls in one area. Instead of waiting for them to call you with a complaint, you can intervene with the right solution before it is too late.

Some behavioral analysis products are available to help you determine which customers are on the brink of churning. Lightbridge demonstrated its Churn Prophet and ChurnAlert at Wireless '98. Churn Prophet is an analytical tool designed to help you reduce churn by using data mining and predictive modeling technology to identify the characteristics of subscribers who have cancelled service in the past. ChurnAlert captures CDR data from the switch to profile and score subscribers. ChurnAlert's profiling technology allows you to analyze call-detail data to score a subscriber's likelihood to churn.

Keenan Systems announced availability of Arbor/Mobile, a comprehensive set of products and services that includes billing, customer care and customer/churn analysis capabilities so you can target the most profitable customer segments of your market, analyze churn patterns and institute campaigns to increase lifetime customer value.

CBIS announced a pilot program with 360degrees Communications to reduce wireless customer churn and increase revenue. The solution integrates the database management strengths and pro-active customer-contact capabilities of CBIS and MATRIXX Marketing, the customer-care businesses of Cincinnati Bell. The solution will use data from CBIS systems to identify and prioritize customers who are most likely to discontinue service, calculate the lifetime value of the customer and the optimum rate plan, and evaluate the financial implications of a wide range of actions. MATRIXX Marketing will determine the product and service attributes valued by specific groups of customers to better predict churn and develop new retention strategies.

"We are trying to prove, based on factors in the marketplace, that customers are price-sensitive, service-sensitive or technology-sensitive," said CBIS's Rohde. "This way, we can demographically segment our customer base so that we can be more pro-active in our efforts."

Other products, such as Harris' SmartCare, guide your customer service representatives (CSRs) step by step through the telemarketing process so that even new agents can add to your bottom line. The SmartCare system includes built-in best practices for handling calls.

"SmartCare creates a competitive advantage by re-engineering the interface between your two most important assets, your subscribers and your employees," said Mark Lawrence, Harris wireless business unit manager. "The agents just have to follow the script. This system allows the CSR to become a customer-care expert instead of just taking a complaint and passing it on."

Ease Their Burden As you begin to offer additional services, you should be able to list them on a single bill as a convenience to your customers. No one likes to get his wireless bill one day, his local phone bill the next and separate bills for long-distance service and Internet access.

ALLTEL recently converged its wireline and wireless operations into a single operating entity, according to Mike Flynn, ALLTEL communications operations president. ALLTEL distributed its first fully converged bill to customers in Little Rock, AR, by combining data from its wireless and wireline billing systems.

"After talking to our customers and conducting surveys and trials throughout our market areas over the past year, we determined our customers want one reliable company with which to do business as well as one bill," Flynn said. "We are pleased that in many of our markets, we will be the first company to offer one single provider for services including local telephone, long distance, wireless, paging and Internet."

The company's Virtuoso II customer-care and billing software system is a comprehensive client-server-based software system that provides customer support, service activation, inventory and billing functions in a point-of-sale desktop format. ALLTEL developed the system in a cooperative effort with GTE.

Speaking of billing through credit cards, Paymentech introduced its automatic payment service for recurring billing to the wireless industry at Wireless '98. Consumers can choose to have their credit cards, debit cards or checking accounts automatically cover their service bills. Wireless service providers then can collect receivables electronically.

Research conducted by Master-Card shows that 34% of surveyed consumers prefer recurring payments by credit card, said Gary Beck, Paymentech recurring payments program senior director. Beck added that one in four consumers would switch to a competitor if he had the option to pay his bill by credit card.

"Recurring payments not only produce operational savings for wireless providers, but also improve customer service and retention," Beck said. "Wireless customers find recurring payment is convenient and easy. There are no checks to write, stamps to buy or bills to mail."

Protect Them From Harm One way to avoid churn is to protect your customers from subscription and cloning fraud. According to CTIA, cloning cost the wireless industry $650 million in 1996. Authentication is the most advanced cloning fraud prevention system for IS-41-based networks. Synacom's CloneSafe Validator securely programs authentication keys (A-keys) into CTIA-certified authentication-capable phones. It also includes the Secure A-Key Management System (SAMS) to generate, store, manage and distribute A-keys and other SAMS parameters and a Secure Authentication Center to provide the IS-41 authentication function. Synacom uses electronic data interchange to obtain A-keys from phone manufacturers for deployment in a carrier's wireless network. The A-key is stored in both the subscriber's phone and the carrier's network. The two are regularly compared, and they must match for a call to be allowed. This process is transparent to the legitimate subscriber.

EDS teamed with ASI Wireless to announce a suite of A-key management offerings: sAfeKEY, sAfeTouch and sAfe-Xchange. A-keys can be provided to ASI's sAfeTouch so that phones can be securely provisioned. A-keys are randomly generated from the EDS sAfeKEY platform. Using secure encryption, the A-keys are transported via ASI's sAfeXchange to the sAFeTouch programming unit.

Subscribers also can program A-keys into handsets themselves. GTE TSI has agreed to provision ORA Electronics' remote programming device, which securely programs A-keys through the handset while eliminating a customer trip to the store. GTE TSI also offers its Encrypt-A-Key Management Center, where it assigns tracking numbers, generates new random A-keys, provisions the authentication centers, programs the device and ships it to the subscriber.

Even though carriers can effectively combat cloning fraud for the time being, subscription fraud still lurks. Lightbridge recently scored points against the $1.1-billion subscription fraud problem when it helped overturn a California Public Utility Commission rule that forbade wireless carriers to share negative customer information. California was the only state with such a law. California carriers will use Light-bridge's ProFile, a deadbeat database of accounts receivable write-offs and service shutoffs that provides on-line prescreening of potentially fraudulent applicants.

With more carriers coming on-line, keeping your customers happy should be your top priority. If you use the resources available to you, your customers might be the subject of some future ad campaign: Mom writing one check for the family's telecommunications services, Dad resting easy knowing his phone is safe from cloning and the kids receiving friendly service from your CSRs.