How to save over a hundred million dollars per year with proactive customer service

Industry Marketing Manager - Communications, IBM

It’s 6 PM, and you just received some bad news: your company’s chief financial officer wants you to cut customer service costs by 5 percent for next year’s budget. The voice of reason in your head screams, “But we're expecting call-center volume to increase by 10 percent next year!” while you look at the cost sheet to go through yet another round of cuts.

This is the plight of customer service managers at most telecommunications companies, but it doesn’t have to be. What if you could reduce the number of incoming calls while lowering churn and increasing revenue? this sound too good to be true? XO Communications, Eir and NTT Plala would disagree.

XO Communications serves small and mid-size businesses (SMBs) throughout the United States with broadband, digital landline and IT services. Using the IBM Proactive Care solution, XO implemented an early warning system for churn that will predict which SMB clients are likely to be unhappy with their service based on over 750 data points. The solution enabled the company to analyze customer service data such as installation time, number of customer care calls, trouble tickets over time and call-center representative notes, allowing XO’s account team to proactively reach out to at-risk accounts before they canceled the service. XO saved over $10 million each year from reduced inbound calls and achieved a 26 percent reduction in customer churn—and the solution paid for itself in only five months.

In Ireland, Eir (formerly Eircom) is leading the way in proactive customer care. Competition for wireless and broadband services was heating up in Ireland, and Eir experienced customer turnover that was costing the company millions of euros every year. Eir analyzed Net Promoter Score (NPS) survey results, including subscriber comments along with network data, to build a comprehensive picture of network experience for all subscribers and their likely satisfaction with the company’s services. Eir identified root causes that led to a poor customer experience and addressed those proactively. The results were impressive; Eir increased its Net Promoter Score, the leading indicator of revenue growth, by 40 points and reduced subscriber churn by 6 percent.

Finally, Tokyo-based NTT Plala Inc. offers consumers and businesses Internet service and IP TV service with specialty channels, movies and animated films. NTT Plala analyzed its viewers’ demographics, viewing habits and billing patterns to personalize recommended channels and programs to increase viewership and identify subscribers at risk of churning. NTT Plala account representatives reached out to at-risk subscribers, reducing customer churn by 21 percent and increasing audience ratings by 150 percent.

Proactive Care can drive as much as $100 million in savings for a service provider with 25 million subscribers. A large North American communications service provider has realized over $400 million in just three years with proactive customer care.

Interested in learning how you can modernize your customer service with proactive care to save millions? Visit the IBM Proactive Care for communication service providers home page for a solution overview, case studies and a white paper from Analysys Mason documenting over $100 million in annual benefits.