About Customer Churn

Customer churn is a problem faced by every business. However in telecoms customer churn is a major issue. This is due to the fact that companies that provide a measurable service are constantly being evaluated by their customers.

Basic Definition: "The customer base which has been silent (no activity) in the network from a specific time period."

Churn Criteria 

Churn calculation varies company to company depending silent duration and network activities

Criteria can be based on following point.

• No single network activities for a specific period time (Weekly, Monthly, N Days)
• No direct revenue generating usages for a specific period time (Weekly, Monthly, N Days)
• No Direct (MOC, SMSMO, Service Fee, Data, MMSMO) & Indirect revenue generating (MTC, SMSMT – MO-MT) usages for a specific period time (Weekly, Monthly, N Days)

Best Practice: Subscriber who has not a single event (VOICE, SMS, DATA, Recharge) for N days; Where N = 30, 60, 90 Days

How to calculate churn - Idle Solution:

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Maintain a repository for all MSISDN as below

MSISDN	LAST_VOICE_ACTIVITY_DATE	LAST_DATA_ACTIVITY_DATE	LAST_VAS_ACTIVITY_DATE

Data Source:

Prepaid Subscriber: CCN Voice, CCN Data, CCN SMS & VAS, Refill

Postpaid: Billing System/ BSCS

Please email to webappslnbd@gmail.com for hints how to prepare the above table.

Query Hints:

SELECT MSISDN FROM TABLE WHERE LAST_VOICE_ACTIVITY_DATE < SYSDATE-90 AND LAST_DATA_ACTIVITY_DATE < SYSDATE-90 AND LAST_SMS_VAS_ACTIVITY_DATE < SYSDATE-90

How to calculate churn - Quick Solution:

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Maintain a repository for all MSISDN as below from MSC

MSISDN	LAST_ACTIVITY_DATE

Data Source: MSC

Please email to webappslnbd@gmail.com for hints how to prepare the above table.

Query Hints:

SELECT MSISDN FROM TABLE WHERE LAST_ACTIVITY_DATE < SYSDATE-90

Net Churn:

Net Churn of a month = Total Churn within this month – Churn Back (become active from churn)

Top Reason for Customer Churn:

• User has switched to other operator/network
• Better network on switched operator
• Better value  = price+quality+service on switched operator
• More suitable product on switched operator
• Attractive Campaign/offer on switched operator
• User is using different MSISDN on same network
• Attractive start-up offer on new MSISDN

Why I need to know churn base:

http://rafm360.blogspot.com/2013/11/how-to-sustain-revenue-growth.html

Customer Churn Statistics:

How to Sustain Revenue Growth

For competitive market it is difficult to sustain or maintaining revenue growth. Following points will give the primary idea which need to taken care of.

• Increase sales & activation
• Proper distribution and product availability
• Attractive Startup offer
• Branding
• Retailer Commission & Coaching
• Decrease churn
• Covert silent base to RG (revenue generating subscriber) base
• Offer for silent base
• Increase more active in network/Week
• Increase churn back
• Offer
• Increase customer loyalty
• Counter offers of competitor
• Better network
• Easy to access to customer service agent/Call center
• Branding/Social responsibilities 
• Easy refill
• Comparative product tariff
• VAS
• Suitable product for each customer segment
• Make the number as primary identity
• Maintain Market Share

Influencing Factors for Short Term Revenue Up and Down

While analyzing day to day or week on week revenue deviation (up/down) following things need to be considered.  Significance of followings factors are varies region to region (geographical).

• Weather:
  Bad weather can cause MoU (Minute of Usage) fall and revenue can decrease. For large geographical area it can be analyzed by compering MoU between impacted areas and non impacted area.
• Political Influence:
  Some times political disturbance can positive and negative impacts in revenue. For fast growing country strikes cause revenue fall
• Festival:
  Now days service revenue (SMS/Data/Voice) increase during festival time.
• Holiday:
  MoU in mess segment generally increase while significance fall in business and corporate segment. If revenue contribution of business segment is high then MoU or Revenue fall in holidays is common
• Weekend:
  Same as holidays impact
• Network Outage:
  Cause revenue fall. Its impacts depends on outage period, location, duration and network load balancing. Some time small outage is covered by adjacent sites and MoU hike in next hours. Outage car start any hour of the a particular areas. By comparing hourly MoU trend between different hours of same location, different location, previous day or same before week day.
• Campaign Start/End for Own Operator
• Campaign Start/End for Other Operator
• Product and Tariff Change

Telecom Service Revenue Source

Before going in depth of RA we must have to know clear idea from where and how revenue is coming from. Mean what are the revenue source. Revenue source can be view in several different aspects. Top most view of revenue sources is customer/consumer.

Service Revenue Elements - Top Down

Revenue of a telecom section coming from customer though the following stream or revenue sources.

1. New Sales
2. Service Fee
3. Refill/Recharge
4. Monthly Bill/Line Rent
5. Interconnect Billing Settlement (IBS)  - Other Operator
6. Roaming Fee (for Inbound Roamer)

Revenue Sources

Revenue Leakage Overview

Here is the overview of a telecom process in the eye of RAFM. It also shows how revenue leakage and negative customer experience might occur in a telecom sector. Leakage can occur at any step of the telecom value chain.

Telecom Process (RAFM Point of View):

Sales > Configuration & Provisioning > Network Operation and Usages > Rating & Billing > Payment & Collection > Audit and Reporting

Basic Reason for Revenue Leakage

• Network & System Errors
• Human Errors (Miss configuration)
• Poor Product/Service Design
• Internal & External Fraud
• Regulatory Non Compliance

Welcome Note - Revenue Assurance & Fraud Management (RAFM)

At this stage of my carrier 2+ year in software industry and later on 6+ year in Telecommunication RAFM (Revenue Assurance and Fraud Management) I fell to review my journey and outline my knowledge and experience which may help others and also me!

For this reason here is my small foot step into the blogging.

Here I will try to tied RAFM with every aspect in the telecom sector. By exploring Telco value chain I will try to implicate the necessity of RAFM.

As I am not a professional writer my initial posts will be in scattered manner in different areas. Later I will give them in sequential shape.

Thanks to all.