Just read an article on Mobile Number Portability and how it’s affecting the South African market. A local company called Knowledge Factory has found a way to measure the loyalty of customers to a mobile vendor using predictive modeling. I also wrote about this in more detail today elsewhere.

Some analysts suggest that more than a quarter of consumers (27 percent) will change networks within a year of the MNP becoming available in South Africa and predictions like this have ensured that customer retention is firmly at the top of the agenda for mobile operators.

…..The mobile communications industry is very product driven and price conscious, two traditional reasons for customer churn, but Moodley suggests that the main driver of churn is service delivery, both in terms of customer service and network performance.

…..To help organisation’s effectively manage their churn, Knowledge Factory uses predictive modelling techniques based on sound empirical evidence and strong analytics. “It’s actually highly transparent,” observes Moodley, “we take a firm’s customer transaction data and then apply sophisticated mathematical models to uncover the churn patterns within it.”

By designing and combining a wide variety of mathematical techniques, including artificial neural networks, statistical regression and decision trees, the company can determine the propensity of any individual customer to cease doing business with an organisation within a given time period.

“The results are often quite surprising,” notes Moodley, “you might be under the impression that customers want the latest phones or trendier outlets, but a large number of those leaving your network might have experienced a considerable number of dropped calls in the last six months.”

Links: Cellular News, Webmetricsguru