Reducing Customer Churn
Case Study - Connecting with Customers
Company - EarthLink
Solution – SAS Enterprise Miner, complemented
with Base SAS with SAS Enterprise Guide for gathering and manipulating
large data sets, and performing complex analysis.
Business Requirement – Earthlink wanted
to expand from a traditional ISP into new lines of business. In
doing so, it wanted to ensure it kept its existing base of customers
engaged. The challenge was to associate customer attributes and
product usage with subsequent churn. Although the company employed
descriptive analytics to track monthly service disconnects, as well
as traditional baseline reporting, EarthLink lacked a holistic,
real-time depth of intelligence into who its customers were, what
they were using and what programs the company could craft to encourage
desired customer behaviors.
Goal – to be able to uncovers the right marketing messages
and product offers to keep customers coming back
EarthLink is retaining customers, increasing product adoption and
reaping US$50 million more in total value. The SAS solution has
provided the capability to identify customers who might be thinking
of leaving and create tailored marketing messages and right product
offers to convince customers to stay . The cost of retaining these
customers is significantly less than acquiring new ones.
- The team responsible for reducing churn and increasing product
adoption modeled customer engagement based on a combination of
customer attributes and usage of different products. For example:
- Some products were free, others were revenue-generating.
- Some products are more closely tied to customer retention
- Create initial models and road maps, with input from product
managers all the way up to executives. The models aim to identify
the strongest drivers to keep customers engaged, to effectively
- Model usage patterns to design optimal marketing programs.
- Using SAS Enterprise Miner, uncover a robust variety of different
types of analysis to test different methods to provide better
answers about what drives customer churn.
- Gain high level of customer insight by examining linear and
nonlinear models of several different groups of customers within
different usage scenarios.
Measurable results were visible within five weeks of implementing
SAS Enterprise Miner.
Reviewing data from multiple dimensions, report on it and drill
down into root cause for churn enabled EarthLink to rapidly identify
which products are most retentive to different customer segments.
They couldn’t do this in the past.
Additionally, the success of the modeling efforts has been easy
to promote within the company - loyalty and retention campaign response
rates have skyrocketed from 5 percent to 20 percent, and the company
has achieved an ROI of 268 percent.
Combining the depth and dimensionality to analyses with the ability
to interpret results and communicate to other stakeholders for rapid
action has been a significant competitive advantage.
Exciting VPs to talk about the ability to predict churn with high
accuracy was powerful and has driven other teams across EarthLink
to see how SAS might be able to improve their own results.
- Being able to leverage every possible aspect of SAS in a very
- The complete modeling platform - automate data cleansing, test
different transformations on many evolving models, and quickly
create and evaluate different types of models.
- Automation of many complex tasks
- Being able to answer complex questions quickly through a flexible
GUI interface allowed business users to quickly build and transform
data sets quickly into meaningful information.
- The way SAS seamlessly integrates data from numerous servers,
as well as my own data, made it the only option for analytics.
- The options presented by SAS provided a variety of ways to
develop real-time analytics and identify the drivers, then proactively
deliver messages to customers.
Not being restricted to providing a ‘one size fits all’
solution, EarthLink were able to take a much more segmented approach,
which has translated into significant cost savings as well as
- In addition to reducing churn, the solution outputs are “helping
customers feel more connected to its products through targeted
messages about usage, product features and pricing options, giving
EarthLink confidence that customer loyalty and product adoption
will continue to grow”.
Next at EarthLink
The company is currently on track to move from an all-time high
churn rate in 2005 for its dial-up customers to an all-time low
by the beginning of 2008 – a 19 percent reduction in churn
that has added an incremental value of $50 million – value
derived from greater revenue due to extended customer life as well
as savings in operational and acquisition costs.
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