Fortune 500 Telecom Giant Uses Quantzig’s Customer Lifetime Value Model to Reduce Attrition by Over 50% | Case Study

Jan 10, 2019

About the Client

The client is an American telecommunications firm, offering wireless products and services.

Business Challenge

The fierce competition in the telecom industry makes telecom operators heavily invest in acquiring new customers. But to be truly profitable, the client realized that, it is crucial not only to attract new customers but also to make sure they remain with the company for a long time as possible. 

The telecom client wanted to identify profitable customers. They noted that marketing across the irrelevant market would lead to financial losses for the company. Moreover, they realized that spending too much on acquiring irrelevant customers would result in revenue losses. With Quantzig’s customer lifetime value model, the client wanted to efficiently spend their resources to acquire potential customers and retain the most profitable ones. Moreover, with customer lifetime value prediction, the telecom industry client was looking out to seek ways to make important business decisions about sales, marketing, and product development, and offer reliable customer support to the customers. Furthermore, with customer lifetime value model, the telecom industry client further wanted to target to the right customers and improve profits.

Solutions Offered and Value Delivered

The customer lifetime value prediction offered by Quantzig helped the telecom company profile the right customers and build a long-term relationship with the customers. The customer lifetime value prediction also sought ways for the client to ascertain sufficient marketing efforts to reduce churn rates and ensure right marketing investments toward the right clients. The engagement also sought ways to develop a marketing strategy that maximized retention and net profit and minimized acquisition costs and remarketing costs. Additionally, the customer lifetime value prediction also offered real-time insights into the target customer and efficiently distinguished customers in terms of the profitable, nearly profitable, and unprofitable segments.

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Altogether, the customer lifetime value prediction helped the telecom industry client gain actionable insights that helped them in identifying and analyzing customer behavior over a period of time. Moreover, the customer lifetime value model also helped the telecom industry client in predicting churn and enabled the design of new programs to reduce customer attrition rate by over 50%. This empowered the telecom client to make critical business decisions pertaining to- sales, marketing, and other product development initiatives while offering reliable support to the customers. 

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Why Customer Lifetime Value Prediction is Important in the Telecom Industry?

With the relative significance of the internet, the telecom sector has manifolded in the last two decades, and the telecom sector is expected to gain significance in the coming years. Moreover, with the relentless demand for agile and seamless services among the target audiences, global telecom industry players are striving to improve their network and offer expanded services to enhance customer lifetime value. Furthermore, digital disruption is redefining the customer experience, bringing both complexities and opportunities for the telecom industry.

Thus, leading companies in the telecom industry are focusing on implementing a customer lifetime value model to analyze the means of catering to the customers in order to sustain in the extremely competitive market. Since retaining and organically growing customers in a telecom sector is a far more cost-effective task than acquiring new customers, leading organizations in the telecom industry have started realizing the importance of customer lifetime value prediction. The customer lifetime value model determines the value of the money that the company spends on acquiring new customers and the customers’ worth over a specific period of time. Thus, companies in the telecom industry are leveraging customer lifetime value analysis for building better customer experience and reduce customer attrition rate.

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