Highlights of the Case Study:
|Client||A global telecom service provider partnered with Quantzig to improve revenue profitability.|
|Business Challenge||The client partnered with Quantzig to set up a price that complements its subscription plans after factoring in the competitor’s price for its offerings.|
|Impact||Quantzig’s advanced telecom analytics solutions developed a balanced pricing model for different offerings, improved revenue profitability, and reduced the churn rate.|
Game-Changing Solutions for Telecom Service
The telecommunications industry is growing steadily with an exponential rise in subscriber base due to the emergence of wireless communication and the ever-growing need for global connectivity. However, the industry is also characterized as a price-sensitive industry with competitive tariffs worldwide. Customer acquisition and customer retention in the industry are driven by the concept of how the company’s offerings are priced in this price-sensitive market. This concept requires the telcos to leverage next-generation advanced pricing analytics solutions to ‘right-price’ their offerings with improved confidence and accuracy.
Quantzig’s pricing analytics teams and industry experts have assisted telecom companies in accurately identifying the trends and patterns in customer purchase behavior and developing and tracking key pricing metrics in order to come up with standard pricing strategies that align with customer needs and budgets, thereby improving revenue profitability.
The Challenges of the Client
A major telecom service provider with a huge subscriber base around the globe was struggling to set up a price that complements its subscription plans after factoring in the competitor’s price for its offerings.
The client was encountering a varying monthly churn rate — an average of nine percent. The client knew that acquiring a new subscriber is about five times more expensive than retaining their existing customer base. In addition, the market was replete with free voice-over services and promo offers brought by various competitors.
In this scenario, the client required our analytics solutions to understand the price sensitivity of their services and thereby improve revenue profitability. Through this, the client aimed to reduce its customer churn rate and stay afloat in the highly competitive telecommunications market.
Quantzig’s Price Sensitivity Analytics Solutions for Telecom Industry
Quantzig created an interactive app based on the existing user profile by leveraging advanced analytics and visualization tools to create a pricing strategy for each subscription plan. It sub-categorized the plans and developed the dynamic pricing strategy based on the customer feasibility criteria.
Our app categorized the client’s customer base into three different zones – the underpriced zone (customers can pay extra for this service), the perfect price match zone, and the overpriced zone, which is a customer churn zone. This helped the client identify which offerings were highly sensitive to price change and where there was a scope for price rise.
Impact Analysis of Quantzig’s Price Sensitivity Analytics Solution in Telecom Services
Quantzig’s data-driven price analytics solution helped the client develop a balanced pricing model for different offerings that aligns with the customer’s requirements and feasibility criteria, develop plans that responded to the ongoing disruption and captured market share, increase its revenue growth by deploying data-backed pricing analytics and eliminating guesswork for pricing their offerings, and enable high customer retention and successful customer acquisition. The client could also factor in the external parameters in its analysis that can affect bottom- and top-line growth.
Quantzig enabled the client to reduce the revenue leakage and reduce churn rate, which was close to five percent and nine percent, respectively, before its partnership with Quantzig.
Quantzig helped the client with analytics solutions to understand the price sensitivity in the telecom industry to develop a balanced pricing model for different offerings that align with the customer’s requirements and feasibility criteria. It increased revenue growth by deploying data-backed pricing analytics and enabled high customer retention. In addition, it helped in successful customer acquisition and reduced revenue leakage. Furthermore, Quantzig’s analytics solutions reduced churn rates.
Broad Perspective on Price Sensitivity Analytics in the Telecom Service
Before this tech-based disruption, companies would follow the traditional approach of benchmarking the value of their services against the prices of similar plans offered by the competitors. This was more of conjecture and lacked accuracy. Companies that are now operating all over the world in all industries are exploiting the advantages that big data can provide. Quantzig’s data-driven analytics solutions are helping businesses in learning more about their customers’ buying habits and spending mindset and creating the right pricing strategy for their products in order to gain a competitive profit margin for their company.
Key Takeaways – Price Sensitivity Analytics Solution
- Developed a balanced pricing model for different offerings
- Developed plans that responded to the ongoing disruption to capture the market share
- Increased revenue growth by deploying data-backed pricing analytics
- Enabled customer retention and successful customer acquisition
- Reduced churn rate by 5%
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