114 Enhance Your Business Applications: Simple Integration of Advanced Data Mining Functions
Low-cost total cost of ownership: For a DB2 UDB site with the IM Scoring
function, no extra software is required. Triggers are part of DB2 UDB and the
JavaMail package is freely downloadable.
The implementation is mainly triggers and SQL, which are easy to implement
and little maintenance. The triggers also is a good way to enforce and
document business rules.
Using a series of triggers, the sophistication of the campaign can be easily
enhanced. For example, instead of hardcoding a threshold of 0.8, you could
use a threshold stored in another table, which in turn can be varied according
to budgetary constraints for an individual campaign.
The combination of DB2 UDB triggers, JavaMail, and the IM Scoring API
allow real-time, focused, intelligent, closed-loop, and relatively inexpensive
6.3 Retention campaign
This campaign shows you how to build and integrate real-time scoring in your
retention campaign process to reduce customer churn. Reducing customer
churn has several goals. One goal is to reduce customer attrition, which is
covered in this case study. Another goal may be to improve customer loyalty so
current customers are not tempted by new, more attractive startup offers.
Change in customer behavior can cause a change in the customer churn score.
Depending on the new score, the customer may be part of a high-risk customer
group and should be contacted by a campaign. The important issues of this
solution are the online churn score and its integration in a campaign
6.3.1 The business issue
This case study deals with the business problem of customer churn in a
telecommunications company. It is defined as detecting the customers who didn’t
renew their contracts on the last 18 months and who may have a high propensity
to leave. By the time the customers have gone to a competitor, it is too late.
The indicators for churn need to be identified early in the cycle. Churn may not
be because of dissatisfaction. However, it may be because of price, coverage,
and so on. The telecommunications company has found that the more services a
customer has, the less likely they are to churn. For example, adding SMS, e-mail,
Web access, and bill viewing to their phone makes customers less likely to churn.
Identifying the right candidates and offering these services can tie them in
regardless of new prices from competitors.