The Customer Profitability Imperative

It well was before the telecom nuclear winter. I, like the rest of you that have weathered the storm, was much younger and had fewer gray hairs. But I digress. In any case, several years ago MCI bought a company called Systemhouse. That started MCI to talking about “data mining,” which the company promised would help it, and potentially other telcos, unleash the “gold mine” of existing customer data stored in their billing and operational support systems. The idea was to enable the telco to selectively collect data on customers and then identify various customer groups based on demographics, buying history and the like. That information could then be used to stem churn, create targeted promotions and otherwise reach the customer in more intelligent ways.

It’s been a long road, but more telecom companies are actually beginning to do this kind of thing. And the wireless companies, which have long struggled with high rates of churn, have been implementing such programs for several years.

But rather than focus this data mining specifically on churn reduction and promotions, there’s a new realization that customer profitability also needs to be a center of focus. That means understanding customers’ revenue contributions and understanding their costs too, as Daniel Kenyon, vice president of communications industry strategy for PeopleSoft Inc., so succinctly puts it in xchange’s cover story this month.

For more on this extremely important subject, turn to page 14.

Of course, it would be remiss of me to pass on this opportunity for comment on the FCC’s recently issued Triennial Review, which Josh Long reports on for xchange on page 8.

As he mentions, the rulings are a mixed bag for the industry. The Bells received the fiber unbundling they were hoping for. The competitive carriers still have access to UNE-P. But, as always seems to be the case with regulatory rulings around telecom, definition of terms is still in question and more court challenges are expected.

Until next time,

Paula Bernier
Editor in Chief

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