The Power of Analysis

Wireless carriers and outsource partners employ many systems for collecting business data. These decision-support systems target and extract information that carriers use to learn about and manage their markets. For carriers, these systems are the keys to success, and continuing effort is made to increase their usefulness.

For example, AirTouch Communications houses several major database systems for business support, according to spokesperson Amy Damianakes. A decision-support system is hooked onto those systems to make strategic business decisions. AirTouch also has a targeting system that enables it to bring in and extract all kinds of data to help manage its markets.

And in today's exploding telecom industry, carriers are managing a greater volume and variety of data than ever before. Data-management systems must function with increased speed and capacity to effectively address churn, fraud, billing, customer acquisition or anything else that potentially may injure the bottom line.

"Ultimately, what we're after is rapid availability of information and new technology enabling us to quickly obtain information that can be used to achieve competitive advantage," Damianakes said

When customer data is collected and organized effectively, carriers can detect patterns of churn, fraud or anything else that presents itself, Damianakes added. The more information the system has to work with, the greater its capacity to extract pieces suggestive of a potential problem. These problems are detected as they develop and nipped in the bud immediately. The power of analysis literally is put to the test.

Putting Data to the Test But can current customer-care and revenue-management systems pass the test? Do systems need a refresher course to effectively meet new requirements for handling today's message-processing needs? According to Kelli Attonito, director of product management for EDS Personal Communications, most revenue-management systems already are equipped to handle large volumes of data. The real issue, she said, is timeliness. Subscriber information loses value as it gets older, so carriers need the capability to analyze information quickly.

To confront this ever-growing challenge, EDS is honing its ability to decrease billing and clearinghouse turn-around times. According to Attonito, EDS has developed real-time data and distribution capabilities that enable you to take information off the switch in a real-time environment and send that information to downstream applications such as billing, customer-care, churn-management or fraud systems.

"Carriers need to get the information as quickly as possible from the switch and to the downstream applications," Attonito said.

EDS also has worked to expedite billing turn-around time for its customers.

"That is critical to our customers -- getting the call record onto the customer's bill as quickly as possible," Attonito added.

Clearinghouse models such as EDS' can help carriers receive and process data more effectively. Located between the subscriber's home carrier and roaming carrier, the clearinghouse mission is twofold: to verify the subscriber's call-record information and to collect and record financial information about the call and its data integrity. Speed always is a critical priority, and EDS has developed processes that ensure that the information is collected rapidly. These processes include electronic file transfer and a continuous processing environment. Both ensure that the information is billed quickly and accurately before it is passed on to the operator.

"Carriers come to us and say they really want the data as fast as possible from the clearinghouse," said Denise Keller, EDS industry-relations manager. "The faster they get the clearinghouse data, the faster they can push it out to other billing vendors, and the faster they can get their revenues from the roaming subscriber."

Up-Front Analysis Although today's systems must be able to process this data quickly, the real challenge comes in the ability to analyze the data properly and put it to good use. One key to effective analysis is the ability to detect problems early on.

Data collection at the point of acquisition can grease the tracks of subscriber processing, and InfoCellular has made this its prime directive. According to Marketing Director Carol Ferrari-Gerbetz, the acquisition process presents carriers with an opportunity to verify credit cards, checks and addresses. With this information, a carrier can confirm a customer's identity.

"From a system perspective, it's critical to have these checks integrated into the acquisition system," Ferrari-Gerbetz said. "You must have these features at the point of sale. In a retail channel, you can take the credit card and verify that the card is not stolen. If the customer writes a check, you can verify that the funds will be collected because habitual bad-check writers will appear on a list."

It also is important to use this time to verify address information. If Joe Smith really lives on 100 Main Street, the credit card will have the same address. When Joe orders something over the telephone, you can confirm that this is the same Joe who lives at 100 Main Street. If it turns out that this Joe is not the right Joe, it's possible that he is using a stolen credit card to gain illegal access to the service.

Credit scoring is another method that can detect fraud quickly, Ferrari-Gerbetz added. Info-cellular's system is equipped to interface with an external system for credit processing and scoring. If the customer has a bad credit history, the score will determine how much, if any, deposit is required, or if the case is serious enough to merit prepayment. Point-of-sale information also may be useful for deterring fraud or bad risk. An acquisition database containing names, addresses and Social Security numbers can help determine how many times a credit card has been used, where it has been used and if there are duplicate cards floating around.

"It's far better to catch these things at the point of sale than to wait until the person is a regular customer," Ferrari-Gerbetz said. "If you uncover problems after the fact, it's pretty likely that the guy is already using the system fraudulently. Stopping him depends on how often you do these checks and when. Post-acquisition checking will allow you to cut your losses as early as possible. You're going to lose something, but not nearly as much as you would if you did nothing."

Tackling Churn Properly analyzing data for potential churn problems is another ongoing challenge for carriers because churn has been seriously exacerbated by government deregulation and the introduction of PCS, according to Mike Callaghan, marketing vice president of corporate development with Matrixx Marketing.

"The phenomenal growth of the industry has masked a growing churn problem," he said. "Thirty percent of the 55 million cellular customers in the United States churn. Carriers don't want to lose these customers because of the huge cost of acquisition -- $300 to $400 is average."

One way to combat churn is to segment the marketplace by looking at the motivations that drive customer behavior. Through individual market-by-market research, Matrixx and its sister company CBIS have identified four customer types: subscribers who want hassle-free service, those who want good service, those who want low prices and those who want all of the above.

Using this type of segmentation to analyze customer characteristics is the foundation of churn management. It gives you the opportunity to contact the customer directly and try to change his mind about churning. The churn index tool also can help predict whether or not a customer is likely to switch carriers. In addition to predicting churn, customer profiles can help determine acquisition costs for each customer. They evaluate the customer's lifetime value based on what his monthly bill has been, how long he has been a subscriber and how likely he is to purchase additional service.

"A typical scenario might go like this," explained Shirley Evans, director of solutions marketing for CBIS. "A customer calls to inquire about his bill. As a result of the inquiry, scores come up on the computer screen identifying this person as both a high churner and a high-value customer. The rate-plan analysis indicates that he should be on a different payment plan, at which point a Matrixx customer-service person walks the customer through a scripted presentation called an intervention, which describes what action to take for that specific customer based on what category he falls into."

For even more productive analysis, you can integrate systems for a total solution perspective. Matrixx and CBIS offer post-call fraud detection with a profiling technique that maps a customer's usage pattern. Anything that falls outside of the pattern raises a red flag. You also should watch for other warning signs such as simultaneous calls from the same phone, out-of-pattern lengthy calls and a sudden increase in international calls.

These precall fraud detection tools and technologies such as authentication, voice identification and PIN punching provide up-front detection analysis. And in the near future, RF-fingerprinted handsets will offer even more secure detection.

Final Analysis Despite these advanced technologies, truly effective analysis depends on the human touch.

"Much of the work of customer-care- and revenue-data management is done by the customer-service person," said Bob Hritsko, group manager of wireless markets for CBIS. "With increased competition, customer service has become much more sophisticated."

With that in mind, you need to invest in retention sales and service and leverage the desktop computer by empowering the customer-service person with more information access. No matter how much information you have or how quickly you get it, none of the data means much if you don't put it to good use, agreed Steve Elsman, vice president & CIO for AT&T Wireless. The real value of customer-care and revenue- management information is revealed once it is analyzed. At that point, it becomes a barometer revealing changes in the marketplace and a tool by which intelligent business decisions can be made.

Right now, AT&T Wireless has the capabilities to handle the data it receives, but the carrier already is planning for future needs in competitive analysis and decision making. As wireless business grows, AT&T will find ways to better integrate its wireless systems with other AT&T systems.

"We will have to be able to analyze the data on a much deeper level to determine how we will go to market with it," Elsman said. "When you have information that is used in different parts of the company, you need to build flexibility into the system so that the data can be analyzed by all parts for the business in order to execute current demands and anticipate future ones."

Corporate spokesperson Ken Woo agreed that the goal of customer-care and revenue-data management is to build a more efficient business and become a much more efficient marketer of services. The proper use of such information can help to guide future planning in terms of customer wants and needs.

"We may actually limit ourselves by trying to foretell the future," he said. "I think the key is flexibility. I've been told that I have more power in my laptop than the first astronauts had. I would argue that we have one toe in the water in terms of what we can do with technology. We are going beyond the age of technology and entering the age of possibility."

As all wireless carriers enter the age of possibility, their revenue-management systems and their own ability to properly analyze that data will be put to the test.