Telecommunication companies around the world face escalating
competition which is forcing them to aggressively market special pricing
programs aimed at retaining existing customers and attracting new ones.
Knowledge discovery in telecommunications include the following
Call detail record analysis—Telecommunication companies
accumulate detailed call records. By identifying customer segments with similar
use patterns, the companies can develop attractive pricing and feature
promotions.
_ Customer loyalty—Some customers
repeatedly switch providers, or “churn”, to take advantage of attractive
incentives by competing companies. The companies can use data mining to
identify the characteristics of customers who are likely to remain loyal once
they switch, thus enabling the companies to target their spending on customers
who will produce the most profit.
Knowledge discovery applications are emerging in a variety of
industries :
_ Customer
segmentation—All industries can take advantage of data mining to discover
discrete segments in their customer bases by considering additional variables beyond
traditional analysis.
_ Manufacturing—Through choice
boards, manufacturers are beginning to customize products for customers;
therefore they must be able to predict which features should be bundled to meet
customer demand.
_ Warranties—Manufacturers
need to predict the number of customers who will submit warranty claims and the
average cost of those claims.
_ Frequent flier
incentives—Airlines can identify groups of customers that can be given
incentives to fly more.
Customer Relationship Management is defined by four elements
of a simple framework:
CRM requires the firm
to know and understand its markets and customers. This involves detailed
customer intelligence in order to select
the most profitable customers and identify those no longer worth targeting.
CRM also entails development of the offer: which products to
sell to which customers and through which channel. In selling, firms use
campaign management to increase the marketing department’s effectiveness.
Finally, CRM seeks to retain its customers through services such as call
centers and help desks.
CRM is essentially a two-stage concept. The task of the first
stage is to master the basics of building customer focus. This means moving
from a product orientation to a customer orientation and defining market
strategy from outside-in and not from inside-out. The focus should be on
customer needs rather than product features. Companies in the second stage are
moving beyond the basics; they do not rest on their laurels but push their
development of customer orientation by integrating CRM across the entire
customer experience chain, by leveraging technology to achieve real-time
customer management, and by constantly innovating their value proposition to
customers