Unlikely churners become prime suspects after WNP

Single parents and small business operators might be the most likely mobile phone users to switch carriers when wireless number portability (WNP) comes into effect on March 14, according to the experience of one industry insider. Scott Radcliffe, business director at analytics software firm SAS Institute Inc. and former senior director of customer lifecycle analytics at US wireless operator Sprint Nextel Corp., says few customers took advantage of WNP when it came into effect south of the border in 2003. But those that did came from unexpected quarters. "It was primarily around folks who have small, highly involved networks," Radcliffe says. "That might be a working mother with a couple of children who has to keep in contact with a lot of people, for whom it’s a big deal not to be able to port your number – because it puts you out of contact for a while. It was that kind of person, as well as really small businesses, micro businesses with three handsets or less. "Before WNP, those folks were less likely than average to churn," Radcliffe says of the unexpected outcome of number portability. Although the customers might have wanted to change to a new carrier, their close-knit social networks made it difficult, because they would have had to tell all of their contacts about their new phone numbers. According to Radcliffe, approximately 15% to 20% of customers leaving Nextel took their numbers with them in the immediate months following WNP availability. But over time, just 5% of those switching providers were bothering to port their co-ordinates. "I would say it has a lot to do with the hassle factor," Radcliffe says, adding some users find it too much trouble to keep their number when switching to another provider. That begs a question: if so few people take advantage of WNP, why did the Canadian and US telecom sectors institute it? It’s not as if customers are churning like mad. Radcliffe figures it has to do with quelling a loud minority. "These are the people having the worst experiences, the folks clamouring to take their number with them. You know how it is. The squeaky wheel gets the grease," he tells Report on Wireless. "Keep in mind, these are also high-value customers. And personally, I think once the ball started rolling…in a few countries, it was bound to happen in other places, too." Nextel took a three-pronged approach to WNP preparation: investing in operations such as the network, billing systems and customer care; investing in the porting process to ensure that a departing customer’s final experience with the carrier isn’t a negative one; and building business analysis systems to find out why customers were leaving in the first place. Radcliffe says Nextel performed "hierarchical or segmented churn modeling – not just a voluntary churn model, but breaking it down into which customers are leaving for handset reasons, for network reasons, billing reasons, for you-can’t-solve-my problem reasons, and my-rate-plan-doesn’t-match-my-usage reasons." The carrier’s serious customer analyses began about a year before WNP came into force. The company also instituted what Radcliffe calls a "targeted resolution program" to please users who were considered to be potential churners. Nextel’s customer analysis team would search for clients who were experiencing problems, such as dropped calls or usage patterns that didn’t suit their airtime packages. Then the client care team would contact the users to discuss the issues. The hope was that customers would appreciate this attention to detail and stick with Nextel as a result. But "it can be a risky thing to do," Radcliffe says. "The customer might not be aware they have an issue." Radcliffe says the growing pains of WNP in the US and other countries might benefit Canadians. "Folks in Canada may suffer a little less" thanks to that experience, he adds.

Unlikely churners become prime suspects after WNP

News | March 12, 2007

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