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This is a dated announcement. The material in this announcement could be superceded by more current announcements.

New Wireless Number Portability Rule increases the Need for SPSS Predictive Analytics to Help Reduce Customer Churn

CHICAGO, 10/14/03 —

Customer loyalty is practically non-existent in the competitive, price sensitive wireless market. With the new U.S. wireless local number portability (WLNP) regulation, which enables wireless consumers to keep the same phone number from carrier to carrier, going into effect in November, customers will have even more freedom to regularly change providers. Proactive wireless companies have turned to SPSS Inc. (Nasdaq: SPSS), the leader in predictive analytics software and solutions, to help them predict which customers are likely to churn and identify the steps that can be taken to retain them.

In the United States, the average wireless telecommunications provider loses 2.5 percent of its customer base each month, or 30 percent annually, according to industry reports. Figures are similar in other parts of the world. Many industry experts predict that the annual percentage of customers lost will increase in the U.S. to 45 percent once the number portability requirement becomes effective on November 24.

Wireless companies in other parts of the globe have already experienced the impact of number portability on their businesses. Mobile operators in Australia, Hong Kong and the United Kingdom, where number portability has been in effect for a number of years, have already experienced significant erosion of their profit margins - particularly those that did not change the manner in which they marketed to customers after number portability became effective.

Number portability and the highly competitive nature of the wireless market have made many wireless organizations focus their marketing efforts on better understanding their customers' needs by gaining deeper insight into their attitudes and behavior. Analytics, such as SPSS predictive analytics - including techniques such as data mining, statistical analysis, text mining, online analytical processing (OLAP) and reporting - enable wireless providers to analyze customer data, find the patterns and trends that indicate the customers most likely to leave for another wireless provider, and identify what actions can be taken to effectively retain those valuable customers.

Rural Cellular Corporation (RCC), which provides wireless service to subscribers in fourteen states in the Midwest, Northeast, South and Northwest covering a population of 5.9 million, uses SPSS analytics for market research. This research includes customer satisfaction and branding studies to determine positioning for its products and service features. Before investing money in any new feature, RCC surveys its customers to determine exactly what features they want, what they want each of the features to do and how much they are willing to pay for them.

"In order to promote loyal customers, we need to determine what our customers want, not just blindly follow the market," says Noel Roos, RCC's marketing communications project manager. "A single-rate plan turned out to be very expensive, as our competitors discovered. So we looked at which aspects of the plan our customers really wanted, such as no roaming charges or a larger coverage area."

SPSS also includes among its wireless customers European providers like Orange Communications SA, one of the largest mobile communications service providers in Europe. Orange Communications SA was able to develop more effective marketing campaigns and significantly reduce customer churn by using SPSS' data mining workbench, Clementine?, to examine its customer database for factors that impact customer retention. The company also uses the Clementine Application Template (CAT) for telecommunications, which is a pre-built data mining module designed specifically to address business problems in the telecommunications industry, such as customer retention and cross-selling.

A number of wireless service providers in China, which continues to lead the world in overall subscriber growth, use SPSS analytical technology to help them retain customers. China Telecom, Jiangsu Mobile and Inner Mongolia Mobile are using SPSS predictive analytics to better target offers, assess credit risks and improve the overall profitability of their marketing activities. SPSS has also made strides in Japan, another dominant player in the global wireless market, through its work with NTT DoCoMo, Japan's largest wireless provider.

"Wireless providers generate massive amounts of customer data, whether it's variables in a database or the text of a customer call," said Colin Shearer, vice president of customer analytics at SPSS. "Our wireless customers recognize that predictive analytics are critical in translating that huge volume of customer data into the insight they need to keep their customers happy."

About SPSS

SPSS Inc. [NASDAQ: SPSS] is the world's leading provider of predictive analytics software and solutions. The company's predictive analytics technology connects data to effective action by drawing reliable conclusions about current conditions and future events. More than 250,000 commercial, academic, and public sector customers rely on SPSS technology to help increase revenue, reduce cost, improve processes, and detect and prevent fraud. Founded in 1968, SPSS is headquartered in Chicago, Illinois. For additional information, please visit www.spss.com .