Question

Telefonica Brasil Customer-Retention Program. Telefonica Brasil is one of the largest telecommunications companies in Brazil. It provides landline and mobile services under the brand name Vivo for some 90 million customers. The company wishes to perform an ongoing customer churn analysis to identify which customers are unhappy and likely to defect to a competitor. Because attracting new customers cost five to six times more than the cost of retaining current customers, implementation of a strong customer-retention program is a critical success factor for any telecommunication company. Which of the following approaches to combat customer churn will maximize profits for Telefonica Brasila. Use call data records, which include customer identification number, call data, call time, and call duration, to identify customers whose status changes from active to inactive and then make those customers special retention offers to entice them to continue as customers.
b. Use customer call data records to identify high-value customers who appear likely to defect; then, consider the likelihood that they will respond to a retention offer plus the cost of the offer itself when determining which customers should receive the offer.

c. Use customer call data records to identify customers who are most likely to defect and who are also most likely to respond to an incentive offer.

d. Recognize that not all subscribers are equal in value, and evaluate the cost to service a customer versus the revenue associated with that customer. Identify high-value customers, and make them all a special retention offer to entice them to remain as customers.

Answer 1

Answer:

a.

Explanation:

Every customer matters, not only should a company focus on her seemingly high-value customers but also on their seemingly low-value customers.

Hence to ensure the retention of their customers and not lose them to competitors, the company should use the customers' data record to provide special retention offers for them to continue as customers.  

Every dollar counts, and no customer can be said to remain forever or leave soon, therefore each of these customers should be treated equally to maximize profit for the company both now and in the long run.