Monday, November 21, 2011

Just because you is paranoid doesn't mean they're not out to get you.


As part of my MBA we had to write some blog posts, this is a adaptation of one such:

Can social media really be a force in the business world? Or will it remain an individual, personal interest?
As long as social media stay an individual interest it will remain a possible force in the business world. Let me give some example of what it could be used for.
In Norway when you want to change phone operator your number is ported to the new operator. Both operators are informed when the porting is initiated. The operator that is about to lose their customer have a short window in which to contact their customer and try to convince him to stay. In Telco, as in any business, retaining customers is important.
Other places in the world they do not have this system, but they would still like to make an effort to retain their customers. This raises the problem: How do I know when a user is about to leave my network?
Lets take a look at what we know, and lets assume we are company A. 

·       We know everything about a call from and A customer to another A customer.
·       We know about calls from an A customer to for instance a customer of company B, and from a customer of company B to an A customer.
·       However we know nothing about calls made from a customer in B’s network to another customer in B’s network or any other non A network.

Instead of looking upon our customers as one big pool of individual customers we could look upon them as a network of customers with many different clusters of acquaintances. When a customer call or receive calls from someone we will treat this as a relationship between these two customers. We store and analyze attributes of this call such as how long is the call, how often are the call made, is it always one sided? When we start looking at all this data we can start making a calling profile for each customer. From this information we can extrapolate a lot of information. Calls to spouses happen very often, but they are usually short. “Hunny, can you buy milk on your way home. Great, love you!” More remote acquaintances like an aunt or an old friend the calls are much rare, but they will last much longer once they happen. Call centers or sales persons only make out going calls and so forth.

If the call profile of a customer suddenly change one of two things have likely happened.
A.    the customer is on vacation and this disrupt their normal call pattern,
B.     the customer is carrying two phones, our phone for incoming calls from people that has not yet been informed of the change in number and the competing operators phone from which all outgoing calls are made.

Ok, we know that there has been a change, should we just wait a week and see if they will return from vacation and resume their call pattern?
NO!
By then it might be to late to offer them incentives to stay with us, remember there is only a short window in which efforts to retain them will work. What should we do? We look for a caller making incoming calls to customers in our network with the same call pattern as the one we suspect is either on vacation or deserting us. If we find a new caller with a foreign number making the same type of calls that our customer previously made the probability is high that we have found a deserting customer. Now, lets just call this customer and offer him an incentive to stay. One of the companies that implemented this was able to retain 30% of the deserting customers.

Do I need to explain what this has to do with Facebook? Instead of looking at outgoing/incoming calls and text messages lets consider friends, status, comments, likes, and relationship information on Facebook.
When you click become a fan of a company what happens? It is almost the same as becoming a friend of the company. Friends we know, have access to a lot of our information on Facebook. Consider for a moment if we could figure out which customers were about to desert us based on incoming calls think what can we discover from analyzing your friendship relationship, your status messages, your comments, your likes and so on? But hold on a second, what information is available to me about the friends of my friends? A lot?
Maybe a policy of non-sharing is not so bad after all.

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