Price Plan Optimization in Telecommunications

The speed at which voice servcies and basic IP services reached a level of commodisation lead most telecommunications providers into a price plan war. This did little to improve profitability, until higher margin data services could be deployed to rebalance the ARPU.

Continuing pressure on service providers to hold on to market share whilst reaching both top-line growth and bottom-line profitability targets is driving deeper complexity into th Telco business model.

The rampant speed of technology innovation and the proliferation of price plan options has further intensified competition. Customer price/value expectations are rising and customers are suffering from price plan drunkedness, eroding customer satisfaction.

The key to resolving these issues lies in a provider’s ability to optimally price product and service bundles. Customers react positively to the perception that they are getting the best value from their service providers. Increasing customer satisfaction means lower churn rates. Price plan optimisation solutions are designed to do just that.

By using price plan optimisation solutions, Telcos are better equipped to ensure their current pricing strategy is supporting corporate strategic objectives. On an tactical level, the systems helps identify key patterns and trends, such as identifying which customers are likely to migrate to a new price plan or switch to a competitor’s plan and how new price plans will likely affect revenue and profitability targets.

Price Plan Optimisation Solutions

Price plan optimisation solutions help Telcos move away from destructive price ware mentality, and instead focus on developing models to improve pricing strategy.

Using powerful predictive analytics, Telcos can:

• Price Plan Performance Analysis
• Identify price plans that are performing well, or poorly
• Identify the most and least profitable customers and market segments
• Develop detailed customer profiles across price plans
• Understand the key drivers within each price plan
• Determine which segments are the best targets for new offerings.
• Understand how current pricing strategy contributes to the success of strategic objectives
• Ensure continuous improvements in pricing strategy
• Build effective bundle offerings and meaningful price plans
• Launch objective-based pricing to help protect and grow market share while adapting to shifts in customer preferences and competitive dynamics.
• Pre-empt risks by projecting the future implications of pricing decisions
  

SAS Price Plan Optimization

SAS Price Plan Optimization provides an integrated price plan strategy, performance analysis and forecasting, price plan migration propensity and interactive simulation. SAS' data integration uncovers insights hidden in disparate data sources [billing systems, CRM systems and activity-based costing systems].

Migration propensity scores and price plan simulation values can be fully integrated into SAS Campaign Management for Telecommunications.

The strength of the SAS solution is the power of its predictive analytics (using trend analysis, forecasting and predictive modeling). In particular:

Performance Analysis

• Assess the effectiveness of price plans across an entire product portfolio
• Assess the performance of a specific plan or service
• Profile customers across price plans
• Identify outliers and which segments are good candidates for highly targeted product offerings.

Price Plan Migration Analysis

• Predict which subscribers have the propensity to migrate
• Project future subscriber movement based on propensity scores
• Profile subscribers with specific migration propensity across price plans
• Analyze usage and revenue generation of those subscriber segments with migration propensity.

Price Plan Simulation

Use simulation techniques to develop actionable price plans to analyze the impact of new price plans on:

• Existing price plans and competitors’ price plans
• Revenue generation and usage among new subscribers
• The cannibalization effect among existing subscribers
• Compare the revenue generation and profitability of specific subscribers or subscriber segments across all price plans, based on available history
• Determine the optimal price plan for specific subscribers or segments
• Simulate subscriber usage and revenue patterns across competitor price plans

Next: Revenue Assurance

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