Understand Customers and Reap the Rewards: IBM Rolls out Analytics for CSPs

Service Management in Action

The market for communications service providers (CSPs) is hot and getting hotter—but it's also getting more competitive by the day. Just as customers are prepared to switch from one handset, application, or operating system to another that seems better, so too are they prepared to switch CSPs.

This means the best strategy available to CSPs lies in understanding customer needs, quantifying them, and fulfilling them as completely, quickly, and accurately as they can. As trends emerge—for instance, increased interest in a particular type of service, accessed over a particular type of network using a particular handset—CSPs need to find new ways to clarify how important those trends are, and create and execute new strategies accordingly. The more effectively they can do so, the higher the odds are that their customers will be satisfied—and remain loyal.

Really understanding customer interests and the customer experience, though, is no walk in the park. And even if strategies are clearly suggested, there's still the tricky matter of execution. They'll need to keep the costs of operations under control, while simultaneously dialing up revenue through strategic innovation.

What's the best way to go about that? Until now, there hasn't been a straightforward, unified solution for CSPs that addresses these challenges. Instead, fragmented tools and processes have been combined in a relatively ad hoc fashion.

All of that changes with the advent of IBM Netcool Network Analytics—a centralized platform of customer experience analysis that CSPs can use to better understand customer context, track and quantify the success of services and strategies, and over time, align what they do as closely as possible to what their customers actually want. This new offering aggregates and analyzes many types of relevant data, slicing and dicing it in ways that empower CSPs to take smarter action, faster, and at lower cost.

Reduce customer churn

"IBM Netcool Network Analytics provides a wealth of capabilities that are directly on point. It delivers, for instance, a real-time, customer-oriented view that incorporates both network diagnostic information and a quantified reflection of the customer experience."

One of the surest ways to get ahead in business is to keep your customers from straying. For CSPs, however, that's complicated by many factors such as network complexity, unpredictable periods of peak demand, and difficulty isolating the root causes of performance bottlenecks. Instead of proactively minimizing or eliminating such issues, they are too often reduced to compensating for them, via customer service tactics such as bill reduction.

Is that good enough? It is not. Studies show that as much as 45% of customer churn comes as a direct consequence of poor network performance.

Toward getting a better outcome, IBM Netcool Network Analytics helps by making network and service performance data far more comprehensible—and actionable—even though different customers have different experiences. The solution can, for instance, identify 2G, 3G, and 4G customers and their handsets, correlate service failures against that data, and thus provide insight into throughput-related issues as well as their significance (both to the customer and the CSP). If network issues aren't actually at fault, but particular handsets are, that's something the CSP certainly needs to know (and will know, with IBM's help).

Historical fault trends thus become much more visible. So do the business consequences. And via all this information, it's much simpler to create prioritized strategies that will improve customer loyalty.

What kind of improvement are we talking about? IBM estimates that by just reducing customer churn 0.5% on a base of 10 million subscribers, CSPs can save as much as $33 million per year—an incredible payoff.

Increase operations and call center efficiency

There's also the question of what happens once customers do experience a problem and report it to a call center. Is the problem understood and resolved, and if so, how quickly and easily?

Here, too, many factors make that question hard to answer. As CSPs have turned to new architectures like cloud, for instance, they've also challenged the effectiveness of legacy application management solutions that were never designed for such an infrastructure. Furthermore, because customers use varying services and handsets, and experience different problems in different ways, it's not always easy to identify what kinds of outages are likely to apply in any given case. This makes it hard to notify customers of expected outages, or swiftly resolve outages when they occur—both crucial to managing expectations.

IBM Netcool Network Analytics provides a wealth of capabilities that are directly on point. It delivers, for instance, a real-time, customer-oriented view that incorporates both network diagnostic information and a quantified reflection of the customer experience. This is specific insight the call representative will certainly need to understand and address a reported problem. And because this insight can also be shared with the operations team, such problems, once discovered, can often be addressed in the infrastructure to reduce the odds of a recurrence.

The expected benefit to CSPs with a user population of 10 million or more? An estimated $9.8 million per year—nearly a dollar per customer.

Manage costs and capital expenditures

As CSPs roll out faster networks—the 4G standard LTE (Long Term Evolution) comes to mind—it's essential for them to control the associated costs. They will, for instance, need to understand better how different customers will be affected, and how that correlates to the expected business outcome, so as to defer capital investment when possible and allocate bandwidth for best results.

In this category, IBM Netcool Network Analytics helps by analyzing revenue versus cost and location. It also identifies the percentage of handsets that aren't LTE-ready. Using this insight, CSPs can then prioritize much slower 2G sites for decommissioning, and optimize spectrum for the LTE network. Multiply that by the number of sites, and it's clear how the cost savings can climb.

How much? Naturally, that will value from case to case. However, IBM notes that a typical CSP with a base of 10 million users that defers 1% of the capital expenditures budget will be saving in the ballpark of $15 million per year—money that can instead be strategically invested in areas of more immediate need, or higher expected return.

Increase revenue and improve service planning

Finally, IBM Netcool Network Analytics can also help CSPs identify opportunities to create new services and generate new revenue. How? By understanding the way this market is changing from the customer's standpoint, and how that change can best be leveraged.

Subscribers who have legacy handsets, for instance, are also subscribers that might be attracted to a smartphone/tablet upgrade. And given such an upgrade, they're also likely to be attracted to the new services that upgrade has made possible. Furthermore, this kind of information, once quantified, can be shared with other service providers or business partners to support collaborative strategies of many kinds.

The possibilities are impressive... and so are the potential gains. IBM estimates that in this way, CSPs might derive almost $8 million in new annual revenues per 10 million subscribers—all due to the deep insight IBM Netcool Network Analytics provides into customers, their handsets, and their usage patterns.

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