At a glance
- A simple forecasting model makes the success expectations of new contracts and contract extensions transparent
- Deviations from actual results amount to a maximum of two percent
- The success of new products and cannibalisation effects can also be recognised at an early stage.
The business situation of our client
Assessing sales performance has always been a special challenge for mobile providers: usually, the revenues and contribution margins from new contracts and contract extensions can only be precisely quantified after a few months. Concrete sales figures for upcoming contract periods are difficult to estimate simply because customers often change their tariff or take advantage of supplementary options during this period. At the same time, sales successes are often incorrectly estimated and rewarded.
Therefore, one of our clients, a leading mobile phone provider in Germany, wanted more transparency and planning security. With relatively simple means, we developed a predictive model that reliably predicts the desired figures.
The solution for our client
The provider has an extensive data pool on the usage behaviour and thus the contribution margins of its customers. However, it is not that easy to predict these figures, as behaviour tends to be variable at the beginning of the contract and only stabilises after a few months. In addition, there are also differences between the customers, depending on the respective region and the sales channel.
We used this diverse detailed data to build our forecast model. A relatively simple technical set-up was sufficient for this. The entire solution is based on an already existing Microsoft SQL Server as well as the Analysis and Reporting Services. In essence, the model applies average calculations to similar customer data and then outputs a corresponding contribution margin.
How data turns into new values
Despite its simple structure, the forecasting process delivers very accurate estimates of future sales directly when a contract is signed. Likewise, the sales performance can be evaluated in a stable manner already on the following day. The deviations from the actual results amount to a maximum of two percent. This also allows our client to recognise the success or failure of new products at an early stage and make immediate adjustments. In addition, cannibalisation effects across different sales channels can be identified very quickly.
turn your data into value.