XO Communications reduces customer churn rate by 50% using IBM Business Analytics


IBM
announced that XO Communications, a provider of broadband communications
services and solutions in the U.S., has reduced its customer churn rates by
nearly 50 percent, largely through the use of IBM predictive analytics
software.


The software
has helped save XO millions of dollars by uncovering deeper insights into
customer behaviors, spotting trends, identifying those likely to defect,
allowing proactive actions to keep their most valuable customers.


In the
competitive communication service provider industry, a fundamental tenet is
that it costs much less to retain an existing customer than it is to acquire a
new one. The challenge is to identify customers who are at the highest risk of
churn before they switch to another service provider.


By
leveraging the power of IBM predictive analytics software, XO Communications, based in Herndon, Virginia,
has achieved significant improvement in customer retention and revenue
protection with better quality customer interactions in contact centers and
through more effective marketing campaigns.


XO has vast
amounts of customer data, including demographics, transaction history, calling
patterns, and conversations with call center agents. They compiled more than
500 data variables on its customers, and used the software to identify specific
trends and correlations in those variables that were the most predictive to
voluntary churn.


By applying
those results to its current customer base, XO could then accurately predict and
proactively engage with the most valuable and profitable customers who carried
the highest churn scores.


“IBM
business analytics software has been the difference maker to our organization,
allowing us to exceed our initial goals by improving retention rates, and
creating millions of dollars in annualized revenue protection,” said Cris
Payne, senior manager of customer intelligence at XO Communications.


“With a
better overall customer experience, XO is now able to stay competitive against
other carriers and improve our overall satisfaction. Our IBM business analytics
portfolio allows us to quickly produce edible customer information leading to
more strategic decisions affecting our top and bottom lines,” Payne added.


Retention
programs focus on keeping customers in contract, and focus on when contracts
should be renewed. IBM predictive analytics allows XO to go beyond just looking
at contract end dates by developing a better understanding of the entire
customer experience.


This allows
the organization to prioritize their proactive outbound calls to “high
risk” customers and better organize their resources. Now, each client
services manager can monitor churn risk on up to 400 accounts.


“IBM’s
business analytics software allows communications service providers to leverage
all available customer data to quickly and accurately increase customer
retention, acquire more profitable customers and create better interactions at
every touch point,” said Deepak Advani, vice president of predictive
analytics at IBM.


Using
numerous IBM business analytics solutions, XO has been able to quickly build
and analyze customer data and share the information across the organization.
IBM SPSS predictive analytics analyzes and scores customer data, while an IBM
Netezza analytic appliance speeds data delivery and facilitates the creation of
faster predictive models. Finally, IBM Cognos business intelligence software
allows everyone across XO to better share, consume and collaborate with the
data more effectively.


According to
analyst firm Nucleus Research, XO recorded a 376 percent ROI in just 5 months,
an average annual benefit of $3,819,200 million.


By
Telecomlead.com Team
editor@telecomlead.com