Airtel developed a customer relationship model based on its global CRM project experiences. The model shows that strengthening customer relationships through relationship-building tactics leads to strong customer loyalty, profitability, and retention over time. Airtel measures these relationship-building tactics and outcomes continuously to ensure its business case requirements are achieved.

1. AIRTEL’S CUSTOMER RELATIONSHIP MODEL
Developed a Customer Relationship Model based on experiences attained from CRM
project engagements globally. The Model shows that the customer relationship is
strengthened by Relationship Building tactics, which are continuously measured
through time. The end result is a strong customer relationship, which lead to
acceptable customer loyalty, profitability and retention. Success criteria such as
share of wallet, profitability and cross-sell rations are also applied as part of the
continous measurement to ensure that Business Case requirements have been
achieved.
SOLVING CUSTOMER RELATIONSHIP MANAGEMENT INVOLVES ADDRESSING A
PRINCIPLES-BASED VALUE CHAIN

2. Technology Data & Applications People & Activities
Data Warehouse/Data Application Specific Data Business Strategy
Mart Model
External Data Providers  Business Process
 Extract & Transformation Data Hygiene / Enrichment Reengineering
 Database  Change Management
 OLAP  Cleansing & Conditioning  Project Management
 Data Mining  Householding - Application
 Statistics - Segment of One Implementation
 Query & Reporting Marketing - Data Warehouse/
 Warehouse Management  Customer Valuation Data Modeling
 Metadata Management  Customer Risk Analysis  Warehouse Architecture
High-End Servers  Profiling and Segmentation  Logical, Physical Design
IT Infrastructure  Predictive Behavior  Channel Integration
 Networking Modeling  DB Implementation
 Network & Systems  Targeted Marketing - IT Infrastructure
Management &CampaignManageme  IT Architecture
 Internet nt  Network Design, Planning
 Web Warehouse Customer Contact & Implementation
 Security Management  Network & System
Integration Technologies Customer Profile Management
 Operational Data Stores Content Management -On-going Customer
 Call Center & Messaging Catalogue Management Support
 Middleware
CHURN MANAGEMENT
What are the commonest reasons for customers to switch from one service
provider to another?
Some of the common driving factors for churn are
 poor performance,
 poor customer care,
 rate plans and

3.  handset issues - GSM or CDMA service.
Regarding churn, something interesting that’s been noticed is that it’s much higher
in the case of pre-paid services, with a churn rate of 8:1, than in post-paid service
where the rate is 3:1.
The idea of pre-paid cards is that the customer will mature to become a post-paid
one and so it pays to retain him too. After all, it’s five times more expensive to
acquire a new customer than to retain an existing one.
HIGH CHURN RATES
The industry standard is around 2 percent a month. The cost of acquiring a new
customer is more than that of retaining one. The cost of acquiring a new customer is
more than five times that of retaining an existing customer. Even if you calculate a
churn of 2 percent a month, an operator is losing 24 percent of its customers every
year. Whatever the numbers, the fact remains that the telecom industry’s bottom
line is getting affected significantly thanks to the high churn rate.
WHY IT HAPPENS
Usually, such a high churn rate is witnessed in more mature markets where
operators try to attract customers from competitors since market growth is
saturated. But with one of the lowest telecom penetrations, the Indian market is
anything but mature. Then what are the reasons for this trend?
Many subscribers shift to another vendor due to brand image. Beyond the brand
image, higher churn is generally attributed to the numerous tariff options available
to customers. A customer may also churn due to billing disputes with a particular
vendor—billing fraud also comes into play. More than tariff plans it is the quality of

4. customer service that prompts a customer to churn or remain loyal. In the current
market scenario there is hardly any difference in offerings, prices and quality of
service offered by different operators. Cut-throat competition has ensured that
there is not much difference between the tariff plans offered by different vendors.
This is where customer service and value-added services come into play. If an
operator doesn’t anticipate market needs or does not provide value-added services
offered by the competitor, then the customer is likely to churn.
Other than this, some of the key factors that encourage churn are inadequate
network coverage, which includes dropped calls that occur in places where network
coverage is thin and blocked calls that occur when the demand for network services
exceeds capacity.
The churn problem is more prevalent in the prepaid segment, which today accounts
for the vast majority of Indian cellular users. The prepaid customer is more price-
sensitive than the post-paid one. With rentals as low as Rs 300, customers with low
usage prefer prepaid cards. Also, students and those who like to experiment with
different networks prefer the prepaid offering.
Bharti Cellular reduced its churn from 3 percent to 2 percent with immense positive
impact on its bottom line after deploying the churn management solution SAS.
Today, they can predict with 80 percent confidence, which customer will churn.
Internationally they have reached accuracy levels of 90-95 percent. But customer
variables keep changing. Hence the solution has to be continuously fine-tuned to
improve accuracy. SAS offers a total end-to-end customer retention solution, which
supports the whole process of managing churn—right from gathering and

5. warehousing data to predictive churn modeling to reporting and distributing
actionable results to decision makers.
The solution enables an operator to gain a better understanding of the variables that
influence customer churn. The solution predicts a customer’s likelihood of
cancellation or switchover by scoring them on a scale of 0 to 1. If a customer scores
0.73 it means there’s a 73 percent chance of his churning. The lower the score, the
more content the customer. Once the scores are known, it is easy to figure out
which customers are likely to switch.
The solution provides the telecom company with a sliced and diced view of the
customer base, thereby empowering it to treat each customer differently as per
needs. The customer attributes typically considered in a churn analysis can be
broadly categorised into customer demographics, contractual data, technical quality
data, billing and usage data and events-type data. But the most commonly used
historic variables include the time a customer spends on air, the number of calls he
makes and the revenue generated from that customer.
The predictive information becomes crucial as it gives the service provider a window
to proactively fix the glitches in service and contain churn, thereby improving
bottom lines. The solution also helps identify cross-sell and up-sell opportunities,
which can have a further positive impact on the operator’s bottom line. Once they
have identified the customers who are likely to churn they can take immediate
measures to retain at least 85 percent of them.
POSTPAID CHURN SOLUTIONS THAT WORK
 Optimising subscriber acquisition costs

6.  Managing retention costs healthily
 How do you keep your customers with an effective pricing dimension?
 Matching the right customer profile with the right marketing bundle creatively
 Learning points from past campaigns
EFFECTIVE CHURN MANAGEMENT AND PERFORMANCE MEASUREMENT
FRAMEWORK
 Exploiting historical churn data and optimising the churn prediction
 Structuring a strong churn management framework
Measuring the effectiveness of your churn management strategy in terms of:
 Methodology
 Results
MINIMISING CHURN & BUILDING CUSTOMER PROFITABILITY
POSTPAID CHURN SOLUTIONS THAT WORK
 Optimising subscriber acquisition costs
 Managing retention costs healthily
 How do you keep your customers with an effective pricing dimension?
 Matching the right customer profile with the right marketing bundle creatively
 Learning points from past campaigns
COMPREHENSIVE APPROACH TO CHURN CONTROL IN HIGH GROWTH AND
COMPETITIVE MARKETS
 Acquiring quality customers
 Using new customer induction and expectation management as a retention tool

7.  Managing monthly payment cycles to minimise defaults
 Engaging channels to expand your reach for your retention programs
 Customer retention
 Revenue stimulation
 Direct customer communication
All these enhancements successfully changed the customer retention paradigm from
a reactive to a proactive one resulting in a continuous decline in postpaid churn over
last year leading to an all time low churn.
BEST WAYS TO PREVENT THESE HIGH RATES OF CUSTOMER CHURN
 Effective customer service could be a deterrent to churn.
 Branding and service differentiators also help in taking customers away from
competitors.
 proper operational and analytical CRM tools in place that would help segment
and analyse customer behavious and predict their propensity to churn.
 It is necessary to proactively strategise and service customers so as to retain the
high value ones.
For Airtel , Analytical customer retention solutions would help identify the high-,
mid- and low-value customers and the valuable ones who are most likely to cancel
services, and their reasons for doing so. They would also help in better campaign
targeting and a more focused strategy.The multidimensional data base (MDDB) that
Airtel has, let internal sales and marketing groups research customer information
from their desktops .
CUSTOMER ACQUISITION

8. Steps:
 Identification of potential customers
 Influence the target customer buying behavior
 Customer acquisition
STRATEGIES:
Introduction of a new tariff plan with different slots like leisure lifestyle, executive
and premium for postpaid customers.AirTel also offers different tariff plans to
different segments like students, professionals, etc.
Airtel has also implemented an e-CRM platform to create a central database of
customer information, to enable pan-India access and service delivery.

9. CRM BUSINESS STRATEGY
In fact, Airtel has seen that CRM actually represents a business strategy that involves
focusing knowledge, business processes and organizational structures around
customers and
prospect for the whole organization. Surrounding this business strategy is an
information technology infrastructure consisting of data warehouses, decision
engines and integrated middleware for touch points/channels in order to better
understand customer behaviour and respond in a timely and relevant manner.
Today’s consumers’ can no longer be treated as a “homogenous collection of
revenue generating unitsӠ, but rather as individuals whose specific wants and
needs determine unique behavior (buying patterns, channel usage, etc.).

10. CRM CONCEPT AND IMPLICATIONS BY AIRTEL
With the increased penetration of CRM philosophies in organizations and the
concomitant rise in spending on people and products to implement them, it is clear
that AIRTEL see improvements to establish long-term relationships with their
customers. However, there is a big difference between spending money on these
people and products and making it all work: implementation of CRM practices is still
far short of ideal. Airtelis recognizing the importance of creating databases and
getting creative at capturing customer information. They Are continous learning
how to develop better communities around their brands giving customers more
incentives to identify themselves with those brands and exhibit higher levels of
loyalty.
One way developing an improved focus on CRM is through the establishment or
consideration of splitting the marketing manager job into two parts: one for
acquisition and one for retention. The kinds of skills that are need for the two tasks
are quite different. People skilled in acquisition have experience in the usual tactical
aspects of marketing: advertising, sales, etc. However, the skills for retention can be
quite different as the job requires a better understanding of the underpinnings of
satisfaction and loyalty for the particular product category. In addition, time being a
critical scarce resource makes it difficult to do an excellent job on both acquisition
and retention. As a result, Airtelhas appointed a chief customer officer (CCO) whose
job focuses only on customer interactions.
In this organization, the person overseeing the company’s marketing activities, the
VP-Marketing, has both product management and the CCO as direct reports. The

11. CCO’s job is to provide intelligence to the VP from marketing research and the
customer database for use by product managers in formulating marketing plans and
making decisions. In addition, the CCO manages the customer service operation.
Although it would perhaps seem more logical for the CCO to report to product
management, the reporting arrangement to the VP-Marketing is a signal to the
company of the prominence of the position. The CCO also interacts with other
company managers whose operations may have a direct impact on customer
satisfaction.
The notion of customer satisfaction is being expanded to change CRM to CEM,
Customer Experience Management. The idea behind this is that with the number of
customer contact points increasing all the time, it is more critical than ever to
measure the customer’s reactions to these contacts and develop immediate
responses to negative experiences. These responses could include timely apologies
and special offers to compensate for unsatisfactory service. The idea is to expand
the notion of a relationship from one that is transaction-based to one that is
experiential and continuous. As with any decision with substantial resource
implications, a cost-benefit analysis of CRM investments must be performed.
CREATING A CUSTOMER DATABASE
A necessary first step to a complete CRM solution is the construction of a customer
database or information file. This is the foundation for any customer relationship
management activity. This should be a relatively straightforward task as the
customer transaction and contact information is accumulated as a natural part of the

12. interaction with customers. The task will involve seeking historical customer contact
data from internal sources such as accounting and customer service.
Ideally, the database should contain information about the following:
 Transactions. This should include a complete purchase history with
accompanying details (price paid, SKU, delivery date)
 Customer contacts. Today, there is an increasing number of customer
contact points from multiple channels and contexts. This should not only
include sales calls and service requests, but any customer- or company-
initiated contact.
 Descriptive information. This is for segmentation and other data analysis
purposes.
 Response to marketing stimuli. This part of the information file should
contain whether or not the customer responded to a direct marketing
initiative, a sales contact, or any other direct contact.
 The data should also be over time.
CRM RESPONSIBLE FOR MAGIC AT AIRTEL
Though it is continuously spreading its wings, expanding its capabilities, and
exploring new horizons, one rule at Bharti remains unchanged: seek out the world’s
best technology and put it at the service of customers. CRM is part of this process.
WHY CRM FOR AIRTEL
In a telecom services company like Bharti, airtime is considered a product. “It is vital
for them to manage the expectations of their customers and provide them with
innovative products and services in a manner which makes them loyal,”.

13. To achieve this, Bharti needed to have the appropriate means. “To better serve their
customers they needed a tool. It is this need that made them to opt for a CRM
(customer relationship management) solution”.
CHERRYPICKING A SOLUTION
Today Bharti is using the Oracle CRM platform. “As part of their vision, they intend
to provide AirTel services anywhere and at any time.
A customer should get the same quality of service no matter which of our call
centres he contacts. This has been the vision, and because of that they have gone in
for a centralised application like CRM. The implementation of CRM also helped
Bharti in having a unified workflow and unified processes across the country.
Before choosing its CRM tool, Bharti evaluated many options. It considered factors
like
 Proper workflow automation
 Facilitation of knowledge sharing
 Integration with the billing system.
After a thorough evaluation, it decided to go ahead with the Oracle CRM platform.
BENEFITS
One of the primary things that Bharti has done with CRM is SEGMENTATION OF
CUSTOMERS, which has helped in providing customers more value for their money.
It is important to understand and segregate customer needs depending on the
product and services he is buying.
METRICS

14. The increased attention paid to CRM means that the traditional metrics used by
managers to measure the success of their products and services in the marketplace
have to be updated. Financial and market-based indicators like profitability, market
share, and profit margins have been and will continue to be important. However, in
a CRM world, increased emphasis is being placed on developing measures that are
customer-centric and give the manager a better idea of how her CRM policies and
programs are working.
Some of these CRM-based measures are the following:
 Customer acquisition costs
 Conversion rates (from lookers to buyers)
 Retention/churn rates
 Same customer sales rates
 Loyalty measures.
 Customer share or share of requirements (the share of a customer’s purchases in
a category devoted to a brand).
All of these measures imply doing a better job acquiring and processing internal data
to focus on how the company is performing at the customer level.
CRM REFERENCE MODEL
This reference model is logically layered model that includes touchpoint, business
application, process, CRM, Data management and Decision support layers. It was
developed as a result from customer feedback and extensive research in the
marketplace on Enterprise

15. TOUCHPOINT AND PRESENTATION LAYER
This layer presents information to the business end-user through a communication
channel-specific device. The presentation and navigation displays a consistent “look
and feel” for input and output information in the format required by the device (e.g.,
browser, terminal, keyboard, keypad, phone) that is consistent across different
business processes and their functions. Navigational aids will be presented to human
interfaces; buttons, hotspots, etc on windows or browser (HTML) based interfaces,
menus or other simpler interfaces such as 3270 terminals, or interactive voice for
voice channels. The navigation function of a front-end helps the user to control the
usuage of, or switch between different elements of the presentation surface, e.g.,
activate a specific window with the mouse, or a select a presentation object specific
function with the right mouse button. In addition, this layer will determine the kind

16. of communication channel being used, and will transform the information going to
and from the process layer to the required interfacing of this communication
channel, e.g., Text-to-speech for Phone/IVR, CGI/Java for Internet, etc.
It will also prepare the user identification and process selections required by the
next layer.
BUSINESS APPLICATION LAYER
This layer determines the communication touchpoint being used, and transforms
knowledge from the touchpoint to the Application such as Billing.
PROCESS LAYER
The process layer provides services to different communication touchpoint- specific
devices, from a single implementation of that specific device. The process layer is
separated into a Contact, Context handler and personalization. The user accesses
information through a communication channel-specific front-end; the user’s
authorization and profile together form a context under which all interaction
between the user and IT functions that form and support a business process are
carried out.
The Contact and Context Handler initiates and terminates the communication
channel/user dependent context with a process/routing engine. It registers the
context to the Contact Management, Segmentation, Routing, Resource Management
and Channel Management making it known to the underlying layers. Personalization
executes the business logic initiated from specific context and selects a set of
business rules specific to the business process.

17. CRM LAYER
This layer represents databases that consist of the single customer view, integrated
contact/dialogue, customer profile, and content information. This layer also provides
for the ability to perform analytics and reporting on the customer experience by
using the variety of knowledge gained from all customer activity.
DATA MANAGEMENT LAYER
The data management layer is the first layer that has no direct link to the business
processes. It represents purely IT centred objects:
Transactions (get data x for user y and reservation z), direct read/write operations
(read user profile u), etc. Its main function is the separation of data storage from
business process functions. This is done by wrapping the calls to the new or legacy
systems and presenting
them as objects to the higher layers. Here, wrapping means transforming data in a
predefined (unchangeable) format to the object representation required by the
object oriented environment. This layer may also use existing data warehouse
management services.
DECISION SUPPORT LAYER
The AIRTEL has been a leader in implementing various decision support applications
in order to determine who their best customers are and what best services to offer
them. Regulatory changes have made this industry so competive that many existing
databases,
campaign management applications, etc. exist and need to be leveraged in the
upper layers of this model.

18. VERTICAL LAYERS
The vertical layers of this reference model provide services that are required by all
the horizontal layers.
DISTRIBUTED APPLICATION AND SECURITY COOPERATION SERVICES
In order to support the mangement of objects between the various layers some
generalized support will be required. DCE-services, Name-services, etc. are other
examples of distributed services. Security services establish an end-to end secure
environment for network and system infrastructure, applications (business
processes and underlying activities), and the data layer. The following services have
to be provided (following the definitions of ISO 7498-2): Identification and
Authentication, Authorization,Protection, Management, Audit, and Non-repudiation.
IT SERVICE MANAGEMENT
All components in the model will have to be managed for availability and
performance (Service Level Agreements). IT management processes and technology
must be in place in order for an IT organization to deliver quality services to its
customers .
CUSTOMER RELATIONSHIP MANAGEMENT - GIS
In today's competitive telecommunications market, for AIRTEL , customer service is
the number one differentiator for companies. Customer relationship management
(CRM) applications improve the relationship between the company and its
customers. Timely service provisioning, response to customer queries, and reporting
on network performance are aspects of CRM. With GIS, call center operators can

19. access all the information on a customer and the associated network based on
location. Databases containing information on outside plant infrastructure, signal
quality, and equipment can be integrated using GIS and made available using a
corporate Intranet.
In CRM, Tier 1 handling means the customer's issue is resolved with the initial call.
Tier 2 calls require initiating a trouble-ticket and obtaining additional information.
Carriers who have successfully implemented GIS support for CRM achieve higher Tier
1 handling and customer service is performed more quickly and economically. With
CRM contacts at an all-time high, improving CRM operations can make a big impact
on the bottomline of a carrier. In the wireless sector, "churn" refers to the rate that
customers jump from one service provider to another. For many carriers, customer
churn is the single largest cost factor. GIS improves the speed and quality of contact
handling, augments customer satisfaction, and reduces churn.