AIRTELS CUSTOMER RELATIONSHIP MODEL

Developed a Customer Relationship Model based on experiences

attained from CRM project engagements globally. The Model shows
that the customer relationship is strengthened by Relationship
Building tactics, which are continuously measured through time. The
end result is a strong customer relationship, which lead to
acceptable customer loyalty, profitability and retention. Success
criteria such as share of wallet, profitability and cross-sell rations are
also applied as part of the continous measurement to ensure that
Business Case requirements have been achieved.

SOLVING

CUSTOMER

RELATIONSHIP

MANAGEMENT INVOLVES ADDRESSING A PRINCIPLES-BASED

VALUE CHAIN

Data Warehouse/Data Mart

Technology

poor performance,

poor customer care,

rate plans and

Application Specifc DataBusiness
Model Strategy
External Data Providers
Data Hygiene / Enrichment
Business Process Reengineering
Change Management
Cleansing & Conditioning Project Management
Householding
- Application Implementation
- Segment of One Marketing- Data Warehouse/ Data Modeling
Customer Valuation
Warehouse Architecture
Customer Risk Analysis
Logical, Physical Design
Profiling and Segmentation Channel Integration
Predictive Behavior Modeling
DB Implementation
Targeted Marketing & CampaignManagement
- IT Infrastructure
Customer Contact Management
IT Architecture
Customer Profle
Network Design, Planning & Implementation
Content Management
Network & System Management
Catalogue Management -On-going Customer Support

Data & Applications People & Activities

Extract & Transformation

Database
OLAP
Data Mining
Statistics
Query & Reporting
Warehouse Management
Metadata Management
High-End Servers
IT Infrastructure
Networking
Network & Systems
Management
Internet
Web Warehouse
Security
Integration Technologies
Operational Data Stores
Call Center & Messaging
Middleware

CHURN MANAGEMENT

What are the commonest reasons for customers to switch

from one service provider to another?

Some of the common driving factors for churn are

 handset issues - GSM or CDMA service.

Regarding churn, something interesting thats been noticed is that
its much higher in the case of pre-paid services, with a churn rate
of 8:1, than in post-paid service where the rate is 3:1.
The idea of pre-paid cards is that the customer will mature to
become a post-paid one and so it pays to retain him too. After all,
its five times more expensive to acquire a new customer than to
retain an existing one.
HIGH CHURN RATES
The industry standard is around 2 percent a month. The cost of
acquiring a new customer is more than that of retaining one. The
cost of acquiring a new customer is more than five times that of
retaining an existing customer. Even if you calculate a churn of 2
percent a month, an operator is losing 24 percent of its customers
every year. Whatever the numbers, the fact remains that the
telecom industrys bottom line is getting affected significantly
thanks to the high churn rate.
WHY IT HAPPENS
Usually, such a high churn rate is witnessed in more mature markets
where operators try to attract customers from competitors since
market growth is saturated. But with one of the lowest telecom
penetrations, the Indian market is anything but mature. Then what
are the reasons for this trend?

Many subscribers shift to another vendor due to brand image.

Beyond the brand image, higher churn is generally attributed to the
numerous tariff options available to customers. A customer may also
churn due to billing disputes with a particular vendorbilling fraud
also comes into play. More than tariff plans it is the quality of
customer service that prompts a customer to churn or remain loyal.
In the current market scenario there is hardly any difference in
offerings, prices and quality of service offered by different operators.
Cut-throat competition has ensured that there is not much
difference between the tariff plans offered by different vendors. This
is where customer service and value-added services come into play.
If an operator doesnt anticipate market needs or does not provide
value-added services offered by the competitor, then the customer
is likely to churn.
Other than this, some of the key factors that encourage churn are
inadequate network coverage, which includes dropped calls that
occur in places where network coverage is thin and blocked calls
that occur when the demand for network services exceeds capacity.
The churn problem is more prevalent in the prepaid segment, which
today accounts for the vast majority of Indian cellular users. The
prepaid customer is more price-sensitive than the post-paid one.
With rentals as low as Rs 300, customers with low usage prefer
prepaid cards. Also, students and those who like to experiment with
different networks prefer the prepaid offering.

Bharti Cellular reduced its churn from 3 percent to 2 percent with

immense positive impact on its bottom line after deploying the
churn management solution SAS. Today, they can predict with 80
percent confidence, which customer will churn. Internationally they
have reached accuracy levels of 90-95 percent. But customer
variables keep changing. Hence the solution has to be continuously
fine-tuned to improve accuracy. SAS offers a total end-to-end
customer retention solution, which supports the whole process of
managing churnright from gathering and warehousing data to
predictive churn modeling to reporting and distributing actionable
results to decision makers.
The solution enables an operator to gain a better understanding of
the variables that influence customer churn. The solution predicts a
customers likelihood of cancellation or switchover by scoring them
on a scale of 0 to 1. If a customer scores 0.73 it means theres a 73
percent chance of his churning. The lower the score, the more
content the customer. Once the scores are known, it is easy to figure
out which customers are likely to switch.
The solution provides the telecom company with a sliced and diced
view of the customer base, thereby empowering it to treat each
customer differently as per needs. The customer attributes typically
considered in a churn analysis can be broadly categorised into
customer demographics, contractual data, technical quality data,
billing and usage data and events-type data. But the most
commonly used historic variables include the time a customer

spends on air, the number of calls he makes and the revenue

generated from that customer.
The predictive information becomes crucial as it gives the service
provider a window to proactively fix the glitches in service and
contain churn, thereby improving bottom lines. The solution also
helps identify cross-sell and up-sell opportunities, which can have a
further positive impact on the operators bottom line. Once they
have identified the customers who are likely to churn they can take
immediate measures to retain at least 85 percent of them.
POSTPAID CHURN SOLUTIONS THAT WORK
Optimising subscriber acquisition costs
Managing retention costs healthily
How do you keep your customers with an effective pricing
dimension?
Matching the right customer profile with the right marketing
bundle creatively
Learning points from past campaigns
EFFECTIVE

CHURN

MANAGEMENT

AND

PERFORMANCE

MEASUREMENT FRAMEWORK
Exploiting historical churn data and optimising the churn
prediction
Structuring a strong churn management framework

Measuring the effectiveness of your churn management strategy in

terms of:
Methodology
Results
MINIMISING CHURN & BUILDING CUSTOMER PROFITABILITY
POSTPAID CHURN SOLUTIONS THAT WORK
Optimising subscriber acquisition costs
Managing retention costs healthily
How do you keep your customers with an effective pricing
dimension?
Matching the right customer profile with the right marketing
bundle creatively
Learning points from past campaigns
COMPREHENSIVE APPROACH TO CHURN CONTROL IN HIGH
GROWTH AND COMPETITIVE MARKETS
Acquiring quality customers
Using new customer induction and expectation management as a
retention tool
Managing monthly payment cycles to minimise defaults
Engaging channels to expand your reach for your retention
programs
Customer retention
Revenue stimulation

 Direct customer communication

All

these

enhancements

successfully

changed

the

customer

retention paradigm from a reactive to a proactive one resulting in a

continuous decline in postpaid churn over last year leading to an all
time low churn.
BEST WAYS TO PREVENT THESE HIGH RATES OF CUSTOMER
CHURN
Effective customer service could be a deterrent to churn.
Branding and service differentiators also help in taking customers
away from competitors.
proper operational and analytical CRM tools in place that would
help segment and analyse customer behavious and predict their
propensity to churn.
It is necessary to proactively strategise and service customers so
as to retain the high value ones.
For Airtel ,

Analytical customer retention solutions would help

identify the high-, mid- and low-value customers and the valuable
ones who are most likely to cancel services, and their reasons for
doing so. They would also help in better campaign targeting and a
more focused strategy.The multidimensional data base (MDDB) that
Airtel has, let internal sales and marketing groups research
customer information from their desktops .
CUSTOMER ACQUISITION
Steps:

 Identification of potential customers

Influence the target customer buying behavior
Customer acquisition
STRATEGIES:
Introduction of a new tariff plan with different slots like leisure
lifestyle, executive and premium for postpaid customers. AirTel also
offers different tariff plans to different segments like students,
professionals, etc.
Airtel has also implemented an e-CRM platform to create a central
database of customer information, to enable pan-India access and
service delivery.

CRM BUSINESS STRATEGY

In fact, Airtel has seen that CRM actually represents a business

strategy that involves focusing knowledge, business processes and
organizational structures around customers and
prospect for the whole organization. Surrounding this business
strategy is an information technology infrastructure consisting of
data warehouses, decision engines and integrated middleware for
touch points/channels in order to better understand customer
behaviour
respond

in

timely

and

and

relevant

manner.

Todays
consumers
can no longer be
treated as a homogenous

collection

of revenue generating units, but rather as individuals whose

specific wants and needs determine unique behavior (buying
patterns, channel usage, etc.).

CRM CONCEPT AND IMPLICATIONS BY AIRTEL

With the increased penetration of CRM philosophies in organizations

and the concomitant rise in spending on people and products to
implement them, it is clear that AIRTEL see improvements to
establish long-term relationships with their customers.

However,

there is a big difference between spending money on these people

and products and making it all work: implementation of CRM
practices is still far short of ideal.

Airtel is

recognizing the

importance of creating databases and getting creative at capturing

customer information. They Are continous learning how to develop
better communities around their brands giving customers more
incentives to identify themselves with those brands and exhibit
higher levels of loyalty.
One way developing an improved focus on CRM is through the
establishment or consideration of splitting the marketing manager
job into two parts: one for acquisition and one for retention. The
kinds of skills that are need for the two tasks are quite different.
People skilled in acquisition have experience in the usual tactical
aspects of marketing: advertising, sales, etc. However, the skills for
retention can be quite different as the job requires a better
understanding of the underpinnings of satisfaction and loyalty for
the particular product category.

In addition, time being a critical

scarce resource makes it difficult to do an excellent job on both

acquisition and retention. As a result, Airtel has appointed a chief
customer officer (CCO) whose job focuses only on customer
interactions.

In

this

organization,

marketing

activities,

the
the

person

overseeing

VP-Marketing,

has

management and the CCO as direct reports.

the

companys

both

product

The CCOs job is to

provide intelligence to the VP from marketing research and the

customer database for use by product managers in formulating
marketing plans and making decisions.

In addition, the CCO

manages the customer service operation.

Although it would

perhaps seem more logical for the CCO to report to product

management, the reporting arrangement to the VP-Marketing is a
signal to the company of the prominence of the position. The CCO
also interacts with other company managers whose operations may
have a direct impact on customer satisfaction.
The notion of customer satisfaction is being expanded to change
CRM to CEM, Customer Experience Management. The idea behind
this is that with the number of customer contact points increasing
all the time, it is more critical than ever to measure the customers
reactions to these contacts and develop immediate responses to
negative experiences.

These responses could include timely

apologies and special offers to compensate for unsatisfactory

service. The idea is to expand the notion of a relationship from one
that is transaction-based to one that is experiential and continuous.
As with any decision with substantial resource implications, a costbenefit analysis of CRM investments must be performed.

CREATING A CUSTOMER DATABASE

A necessary first step to a complete CRM solution is the construction

of a customer database or information file. This is the foundation for
any customer relationship management activity. This should be a
relatively straightforward task as the customer transaction and
contact information is accumulated as a natural part of the
interaction with customers. The task will involve seeking historical
customer contact data from internal sources such as accounting and
customer service.
Ideally, the database should contain information about the following:
Transactions. This should include a complete purchase history
with accompanying details (price paid, SKU, delivery date)
Customer contacts. Today, there is an increasing number of
customer contact points from multiple channels and contexts.
This should not only include sales calls and service requests,
but any customer- or company-initiated contact.
Descriptive information.

This is for segmentation and other

data analysis purposes.

Response to marketing stimuli.

This part of the information

file should contain whether or not the customer responded to

a direct marketing initiative, a sales contact, or any other
direct contact.
The data should also be over time.
CRM RESPONSIBLE FOR MAGIC AT AIRTEL

Though it is continuously spreading its wings, expanding its

capabilities, and exploring new horizons, one rule at Bharti remains
unchanged: seek out the worlds best technology and put it at the
service of customers. CRM is part of this process.
WHY CRM FOR AIRTEL
In a telecom services company like Bharti, airtime is considered a
product. It is vital for them to manage the expectations of their
customers and provide them with innovative products and services
in a manner which makes them loyal,.
To achieve this, Bharti needed to have the appropriate means. To
better serve their customers they needed a tool. It is this need that
made them to opt for a CRM (customer relationship management)
solution.
CHERRYPICKING A SOLUTION
Today Bharti is using the Oracle CRM platform. As part of their
vision, they intend to provide AirTel services anywhere and at any
time.
A customer should get the same quality of service no matter which
of our call centres he contacts. This has been the vision, and
because of that they have gone in for a centralised application like
CRM. The implementation of CRM also helped Bharti in having a
unified workflow and unified processes across the country.
Before choosing its CRM tool, Bharti evaluated many options. It
considered factors like

 Proper workflow automation

Facilitation of knowledge sharing
Integration with the billing system.
After a thorough evaluation, it decided to go ahead with the Oracle
CRM platform.
BENEFITS
One of the primary things that Bharti has done with CRM is
SEGMENTATION OF CUSTOMERS, which has helped in providing
customers more value for their money. It is important to understand
and segregate customer needs depending on the product and
services he is buying.
METRICS
The increased attention paid to CRM means that the traditional
metrics used by managers to measure the success of their products
and services in the marketplace have to be updated. Financial and
market-based indicators like profitability, market share, and profit
margins have been and will continue to be important. However, in a
CRM world, increased emphasis is being placed on developing
measures that are customer-centric and give the manager a better
idea of how her CRM policies and programs are working.
Some of these CRM-based measures are the following:
Customer acquisition costs
Conversion rates (from lookers to buyers)

 Retention/churn rates
Same customer sales rates
Loyalty measures.
Customer share or share of requirements (the share of a
customers purchases in a category devoted to a brand).
All of these measures imply doing a better job acquiring and
processing internal data to focus on how the company is performing
at the customer level.

CRM REFERENCE MODEL

This reference model is logically layered model that includes
touchpoint, business application, process, CRM, Data management
and Decision support layers. It was developed as a result from
customer feedback and extensive research in the marketplace on
Enterprise

TOUCHPOINT AND PRESENTATION LAYER

This layer presents information to the business end-user through a
communication

channel-specific

device.

The

presentation

and

navigation displays a consistent look and feel for input and output
information in the format required by the device (e.g., browser,
terminal, keyboard, keypad, phone) that is consistent across
different business processes and their functions. Navigational aids
will be presented to human interfaces; buttons, hotspots, etc on
windows or browser (HTML) based interfaces, menus or other
simpler interfaces such as 3270 terminals, or interactive voice for
voice channels. The navigation function of a front-end helps the user
to control the usuage of, or switch between different elements of the
presentation surface, e.g., activate a specific window with the
mouse, or a select a presentation object specific function with the
right mouse button. In addition, this layer will determine the kind of
communication

channel

being

used,

and

will

transform

the

information going to and from the process layer to the required

interfacing of this communication channel, e.g., Text-to-speech for
Phone/IVR, CGI/Java for Internet, etc.
It will also prepare the user identification and process selections
required by the next layer.
BUSINESS APPLICATION LAYER

This layer determines the communication touchpoint being used,

and transforms knowledge from the touchpoint to the Application
such as Billing.
PROCESS LAYER
The process layer provides services to different communication
touchpoint- specific devices, from a single implementation of that
specific device. The process layer is separated into a Contact,
Context handler and personalization. The user accesses information
through a communication channel-specific front-end; the users
authorization and profile together form a context under which all
interaction between the user and IT functions that form and support
a business process are carried out.
The Contact and Context Handler initiates and terminates the
communication

channel/user

dependent

context

with

process/routing engine. It registers the context to the Contact

Management, Segmentation, Routing, Resource Management and
Channel Management making it known to the underlying layers.
Personalization executes the business logic initiated from specific
context and selects a set of business rules specific to the business
process.

CRM LAYER
This layer represents databases that consist of the single customer
view, integrated contact/dialogue, customer profile, and content

information. This layer also provides for the ability to perform

analytics and reporting on the customer experience by using the
variety of knowledge gained from all customer activity.
DATA MANAGEMENT LAYER
The data management layer is the first layer that has no direct link
to the business processes. It represents purely IT centred objects:
Transactions (get data x for user y and reservation z), direct
read/write operations (read user profile u), etc. Its main function is
the separation of data storage from business process functions. This
is done by wrapping the calls to the new or legacy systems and
presenting
them as objects to the higher layers. Here, wrapping means
transforming data in a predefined (unchangeable) format to the
object representation required by the object oriented environment.
This layer may also use existing data warehouse management
services.
DECISION SUPPORT LAYER
The AIRTEL has been a leader in implementing various decision
support applications in order to determine who their best customers
are and what best services to offer them. Regulatory changes have
made this industry so competive that many existing databases,
campaign management applications, etc. exist and need to be
leveraged in the upper layers of this model.
VERTICAL LAYERS

The vertical layers of this reference model provide services that are
required by all the horizontal layers.
DISTRIBUTED APPLICATION AND SECURITY COOPERATION
SERVICES
In order to support the mangement of objects between the various
layers some generalized support will be required. DCE-services,
Name-services, etc. are other examples of distributed services.
Security services establish an end-to end secure environment for
network and system infrastructure, applications (business processes
and underlying activities), and the data layer. The following services
have to be provided (following the definitions of ISO 7498-2):
Identification

and

Authentication,

Authorization,Protection,

Management, Audit, and Non-repudiation.

IT SERVICE MANAGEMENT
All components in the model will have to be managed for availability
and performance (Service Level Agreements). IT management
processes and technology must be in place in order for an IT
organization to deliver quality services to its customers .

CUSTOMER RELATIONSHIP MANAGEMENT - GIS

In today's competitive telecommunications market, for AIRTEL ,
customer service is the number one differentiator for companies.
Customer relationship management (CRM) applications improve the
relationship between the company and its customers. Timely service

provisioning, response to customer queries, and reporting on

network performance are aspects of CRM. With GIS, call center
operators can access all the information on a customer and the
associated

network

based

on

location.

Databases

containing

information on outside plant infrastructure, signal quality, and

equipment can be integrated using GIS and made available using a
corporate Intranet.
In CRM, Tier 1 handling means the customer's issue is resolved with
the initial call. Tier 2 calls require initiating a trouble-ticket and
obtaining additional information. Carriers who have successfully
implemented GIS support for CRM achieve higher Tier 1 handling
and customer service is performed more quickly and economically.
With CRM contacts at an all-time high, improving CRM operations
can make a big impact on the bottomline of a carrier. In the wireless
sector, "churn" refers to the rate that customers jump from one
service provider to another. For many carriers, customer churn is the
single largest cost factor. GIS improves the speed and quality of
contact handling, augments customer satisfaction, and reduces
churn.