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Risk Management

By Bruno Curto Marques   | 

 Tags: Risk Management



Business Optimization Software versus Robotic Process Automation

It is significantly different to discuss telco churn rates when referring to Western Europe or South America. You probably would agree with me if I said that the majority of the CSP’s churn rates vary somewhat between 1% and 5%, per month, depending on the competition maturity and country development.

Now let’s imagine a 10 million customers CSP. Every month, depending on its geographic location this CSP faces 100k (Western Europe) to 500k (South America) potential churners. Considering that it is much more expensive to acquire a new customer (roughly seven times on average) than to maintain and sell to an existing one - even by making him an offer that might decrease his overall lifetime value - you would want, not only to identify correctly who are those churners, but also to act upon them, at a minimum cost, in order to retain him in your network. For companies who follow a retention policy, one of the next intelligent things to do would be to initiate a campaign to retain the potential churners.

Let us now assume those companies contact 1/5 of the customers most likely to churn. That would mean contacting 20k to 100k customers, depending on your location.

An outbound campaign would cost $40/hour in Europe, and around $25/hour in Latin America with 12 calls made per hour. That means spending something between $67k and $208k, respectively. Once again, depending on your location. Considering that 2.5% would be a plausible value for call center and customer service support costs, as a percentage of CSP’s overall revenues, all call center savings would have a significant impact on CSP’s bottom line.

So, the question is: how can a CSP reduce its outbound campaigns costs?

There are at least two options it can consider:

  • By lowering the duration of each call, thus increasing the number of calls per hour, and for that it can use Robotic Process Automation in order to gather the information from the different systems, making it ready and available, quicker, for the operator to use while talking to the customer and save time while navigating between systems, or
  • It can reduce a significant part of the calls, eliminating the costs in those cases, by using Business Process Optimization, using the analytics output data that determines the most probable churners and immediately initiate automatic actions that would replace call center calls, or at least, part of them.

Robotic process automation (RPA) is the application of technology that allow the configuration of computer software or a “robot” to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems. It does so by accessing applications like a human would, and simulating the operations.

Business Optimization Software (BOS) is the use of technology to refine and leverage the benefits of customer relation, by using historical and analytical models processed data in order to automate targeted actions, leading to better company results and customer satisfaction.

The two concepts, and technologies beneath it, share some characteristics, and are different in others.

Both gather and validate information, aggregating info from internal systems. The difference between them is that RPA does it action-by-action, repeating the same actions a human would, and BOS integrates all information needed: analytic output models’ data, historical data, social feeds data, uses it to automatically take the actions on background.

Both calculate and decide what to do, orchestrating and managing activities. RPA does it by learning and replicating the actions a human would take, and BOS uses analytical data outcomes to decide what next actions to take, based on rules, given or learned.

Both have monitoring, detection and reporting capabilities.

Summarizing, CSPs have to deal with the risk of identifying correctly potential churners, and that can only be done by using the analytical models included on Business Process Optimization software. But in what regards taking the appropriate actions to retain those customers there are options to help them create additional value, either by increasing call center efficiency (RPA) or saving costs by using automated informed and targeted actions instead of call center operators (BPO)

For more information or to speak with one of our business optimization specialists, visit www.wedotechnologies.com.


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