Post on 17-Jun-2015
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Customer data drivenmarketing for digital services
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Contents
1. Executive summary 3
• Catalyst• Executive overview• Key messages
• The importance of digital services• The data dilemma
2. Market context 5
3. Ensuring higher adoption rates 7
• Turning user data in to customer data• Directing the search and discovery
• Ensure you have a value proposition to convey• Precision marketing to boost usage with soft targets• Customer data underpins service personalization
4. Enhance revenue streams through targeted marketing and personalized services
9
6. Managing churn 13
7. Give greater management and control to customers 14
9. Appendix 15
• About Mahindra Comviva• Ovum Consulting• Disclaimer
5. Exploit upsell opportunities
• Getting the basics right
12
• Dimension data packs to support offers to customers
148. Right-sizing the operators’ commercial response
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Executive summary
Catalyst
Using customer data to better target marketing
campaigns is recommended practice. As digital
services gain in prominence, the ability to access
and action specific insights on customers
becomes even more important. Using more
detailed information to personalize those services
and marketing offers is the surest way that
operators can maintain and efficient operation,
delight customers and generate the kind of value
that will positively impact their top line growth.
Executive overview
Frequent outbound marketing campaigns have
become part of daily life for operators and their
customers. However blanket promotions,
extending the same deal to the entire subscriber
base, can backfire. They are costly to deliver, may
cannibalize existing revenues, and return a poor
response rate, and messages that are consid-
ered as irrelevant spam by the recipient are
more likely to annoy than delight them.
To reverse these factors - to make outbound
marketing cost effective, enhance revenues and
return a high response rate – operators need to
be able to segment customer data and use
analytics to extract insights that allow them to
match their customers with personalized
promotions and value-added services at the right
time. In addition, operators want to be able to use
that access to customer data and the insights
they derive, to cross-sell further offers, as well as
offer that insight to interested third parties.
Operators therefore need customer data
analytics tools to make this happen, and this
paper will look at how operators in mature and
emerging markets can use customer data to
increase their services revenues through better
management of the customer journey, and by
targeting their marketing activities across
multiple digital services.
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Key messages
Operators hold enormous amounts of
information on user behavior and consump-
tion patterns. They also have very pertinent
offers that they could make, but still struggle
with linking the customers with the right offer
at the right time.
Analyzing user behavior as they search and
discover the operator’s services can provide
insights that convert users to customers.
Providing a service that is customized to an
individual profile, particularly where specific
music and content likes and preferences
are taken into consideration, can provide an
enhanced revenue stream from existing
customers.
Once customer data has been extracted and
analyzed, operators can use the data to offer
third parties similar insights.
Customers like to control their own destiny,
so it is important that operators provide
transparency and controls on how their
customer data is used and shared.
Operators need to ensure they link their
marketing offers to their provisioning capabili-
ties, so that the right data packs and tariff
plans are offers with promotions.
Operators need to investigate the analytics
tools that will allow them to develop
data-driven marketing programs that are fit
for purpose.
Market context
The importance of digital services
Digital services are used by customers to
communicate in their daily lives, and are increas-
ingly used for a wide array of infotainment
activities. The operator services portfolio has
expanded considerably as service providers use
their network to deliver all manner of applications
and value-added service from health education, to
finance and gaming. The channels to access
these services are equally diverse and range
from well-established SMS, Unstructured
Supplementary Service Data (USSD) technology
for GSM and PCN networks, as well as more
recent portals and social media. Operators need
to use the customer information all this activity
generates to direct their own sales, marketing,
and customer care investments and have a clear
outbound marketing strategy to optimize the
channels that best suit their various customer
segments.
If a customer has interacted via an IVR or contact
center, then the window of opportunity to
positively influence that customer is around the
2-3 minute mark. It is therefore imperative that
telcos use their SMS channels or portals to
solicit feedback and get the interaction with their
customer right. In mature markets, online digital
channels (website or portal) are increasingly the
predominant (and in the case of low cost brands
and MVNOs, the only) method for operators to
engage with customers. The operator has only a
few seconds to influence would-be customers or
upsell to existing customers, Analyzing customer
data can play a valuable role in helping marketers
to judge the effectiveness of their web or portal
content, as well as helping them to target each
visitor with the right content.
The data dilemma
Operators hold customer data in a variety of
locations - central and distributed databases,
OSS, BSS and CRM systems. Even in the mobile
prepaid world, operators collect personal data
through registration and billing as well as through
ongoing usage. The data can be used to support
sales, fulfillment, marketing, care and billing
systems activities, however operators are unable
to fully leverage the true value of the data due to
the absence of an end-to-end view of the various
process engagements (search and discovery,
order-to-activation, time-to-resolve) and lack of
actionable insights. In a recent Ovum survey, only
27% of operators claimed to have fully deployed
customer analytics (see Figure 1), and it is this
lack of insight that makes it difficult for operators
to optimize interaction with their customers.
Obtaining insights from customer data should be
the cornerstone of any marketing campaign, but
it should begin even earlier, at the search and
discovery phase, as customers investigate the
best offer, and again during the order-to-activate
process.
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If operators are able to leverage this data they
would be in a far better position to improve their
marketing campaigns and customer engagement
processes. Effective use of customer data allows
operators to improve in many areas, but the
most immediate benefits are:
higher adoptions rates through managed
search and discovery, and targeted
campaigns
enhanced revenue streams through delivery of
personalized services
ability to fully exploit upsell opportunities
managing churn
greater management and control to customers,
and
‘right-sizing’ of commercial offers to customers.
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Figure 1. Operator BI deployments for customer intelligence
27%
12%
31%
21%
9%
Not considering
Considering Fully deployed
TriallingPlanning
Source: ICT Enterprise Insights, Global Telecoms, Sept 2013, n=454
Ensuring higher adoption rates
Turning user data in to customer data
Individual key clicks, navigation through an IVR,
the percentage of abandoned calls, and conver-
sion rates can all be gathered and aggregated
using analytics. By monitoring where and how
users interact with the operator and where they
abandon visits, operators can work to improve
their outreach programs. The most advanced
analytics packages support automated behavioral
targeting and use a self-learning engine to build
unique visitor profiles based on individual visitor
data and click scoring to websites. This allows
personalized content to be delivered based on a
person’s past and current interests, even if they
are not an existing customers. However, being
able to recognize a subscriber and their location
and any point in time is also important in deter-
mining a preventative activity or proactive
response.
The biggest value from analytics for marketing
departments is the ability to gather profiling
information on a visitor, allowing goods and
services to be targeted at individuals, based on
when and how they contact an operator. Each
time a user responds to an SMS messageor
returns to the website, the amount of data
collected about that user will increase, resulting
in the ability to further refine the products
presented to that visitor and increase the
likelihood of converting them in to a customer.
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Figure 2. Maximizing data points in the customer journey
Customer journey
Brand awareness Transaction Support Retention AdvocacyOfferevaluation
Customer engagement touchpoints
Marketing Acquisitionmanagement
Channelinvestigation
Personalizedservices
Customer(value)
campaigns
Targetedmarketing
Role of big data analytics
Influence On board Minimize Uplift net Increase
to churnnext best
offerwith correct
tariff
Attract desiredcustomer profile propensity
scorepromoter
spendaverage
Source: OVUM
Directing the search and discovery Analyt ics prov ide the informat ion
operators need to personal ize the
users’ exper ience. The level of
sophist icat ion of analyt ics products
has increased great ly from the t ime
when they were only able to prov ide
basic informat ion; now i t is possib le to
see how users access a serv ice, for
example from a search engine, by
typ ing in the URL, from a socia l
network s i te , or v ia a landing page –
a l l of th is informat ion can be used to
target speci f ic serv ices at an
indiv idual .
Personal izat ion at the search and
d iscovery phase wi l l increase the
l ike l ihood of a user becoming a
customer. Most people wi l l not spend
hours look ing for what they want , so
the abi l i ty to ant ic ipate their
requirements and serve up the
content they require, with a push SMS
or a few c l icks is a huge advantage,
part icu lar ly for mobi le dev ices. In
addit ion to informat ion on indiv iduals ,
data can be aggregated to prov ide
detai led informat ion on a range of
factors: the number of v is i tors to the
s i te , the number of h i ts each page
receives, where v is i ts were
abandoned, and the numbers of
v is i tors enter ing the s i te by each
route. Using th is informat ion,
marketers can assess whether v is i ts
are regular ly being abandoned at the
same point , which may s igni fy a
problem with the website such as poor
content , d i f f icu lty in nav igat ing past
that point , or a broken l ink .
Once the customer selects a serv ice
or of fer , inte l l igent use of customer
data can faci l i tate the onboarding
process. Customers should certa in ly
not be required to complete forms or
resubmit their deta i ls ; any required
informat ion should be automatical ly
generated for the care agent - better
st i l l , one touch should be a l l that is
required to s ign up and act ivate the
serv ice or of fer .
Using customer data analyt ics ,
operators can promote serv ices to the
most recept ive market segments and
inf luence the search and d iscovery
process. By look ing at customer
prof i les and web search act iv i ty for
example, the operator can determine
customer propensity to adopt certa in
serv ices or of fers, and/or d irect
customers to a predef ined or
appropr iate set of choices.
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9© Ovum. Unauthorized reproduction prohibited.
Ensure you have a value proposition to convey
A point for operators to consider before they
embark on their marketing strategy is how they
promote and position their digital services
generally. For example, operators should look at
ways to draw back from offering too many free
services. It is hard to persuade customers of the
value they can receive from the operator, if the
operator itself apparently places no value on a
service. It will be tough battle, but operators must
try to wean customers off their flat rate and
unlimited usage plans, and offer alternative value.
To entice new customers and persuade existing
customer to invest further in the brand, opera-
tors often swamp customers with multiple
marketing offers and associated product
campaigns via email and SMS. Again, operators
should reflect on the wisdom of this action.
Sending out offers to the entire customer base is
the mark of careless business that confuses
activity with productivity and equates volume with
value. An outreach to the entire user base is
rarely cost effective or profitable, as it does not
take in to consideration the value or profitability
or each customer, nor does it increase the upsell
and cross-sell opportunities, or associated
customer loyalty and satisfaction.
Enhance revenue streams through targeted marketing and personalized services
Figure 3. Targeted marketing opportunites using customer data analytics
Targeted
marketing
opportunities
Sell to 3rd party
Next best offerUp & cross sell
Campaignmanagement
Precisionmarketing
Personalizedservices
Source: OVUM
10© Ovum. Unauthorized reproduction prohibited.
Precision marketing to boost usage with soft targetsOperators can gain some quick wins
for revenue enhancement by target ing
those areas capable of demonstrat ing
quick returns with minimum
investment . Such areas inc lude
improv ing recharge frequency among
targeted segments, part icu lar ly the
mult i -S IM customers, or react ivat ing
dormant customers.
Most loya lty market ing programs
reward frequent users and encourage
greater or d i f ferent types of usage.
They rarely look at customers with
more irregular usage patterns. MTN
Niger ia , for example, analyzed
customers’ usage patterns to ident i fy
mult i -S IM users. Ind icators inc luded a
var iat ion in the normal top-up
patterns. For example, i f the customer
d id not recharge for a couple of
weeks, and then eventual ly tops up
with a lower weekly amount than
normal , or only makes on-net cal ls or
sends SMS – th is behaviour indicates
an increased l ike l ihood to churn to a
compet itor . By monitor ing exact ly
these act iv i t ies , MTN Niger ia was able
to push suitable of fers to th is group,
and increase frequency of usage and
the top-up amounts and so mit igate
the churn r isk
Customer data underpins service personalizationWhen one considers the d ig i ta l noise
that occurs in customers’ work and
socia l space, operators need to
ensure that their customers don’t just
hear, but actual ly l isten to what they
have on of fer compared to their
compet itors. L istening only comes
about when the operator is proact ive ly
pushing out re levant and personal ized
support and of fers, at the r ight point
in t ime.
Apply ing a r ing-back tone to a
part icu lar cal ler is a s imple example
of va lue-added features that
customers want from their operators,
but operators’ market ing departments
can take th is to the next level with
further personal izat ion. For example,
Ind ian operator Airte l has ro l led out a
‘Hel lo Tunes’ serv ice across i ts
propert ies . Hel lo Tunes a l lows
customers to p lay an outbound
r ingback tone based on their own
mood or context , so whi le the cal ler is
wait ing to be connected, they wi l l hear
a song rather than just the ‘r ing, r ing’ .
A irte l c la ims th is th is type of serv ice
a lone has increased revenue from
downloads, and increased i ts
subscr iber base and revenues overal l .
Customers could select music tracks
from a broad storefront , which
promoted categor izat ions by genre,
internat ional songs, latest songs and
top 10 bestsel lers and so forth.
However th is d id not address personal
preferences, and for some customers,
i t was a lmost impossib le to f ind a
part icu lar music track. For example,
70% of users in Circ les B and C in
India use IVR as the predominant
serv ice access channel , and
customers had to work through
lengthy menus and incur h igh IVR
browsing charges to f ind a tone of
their choice.
Hel lo Tunes is part of a broader
MyLikes proposit ion that prov ides a
personal ized music storefront . I t
makes re levant recommendat ions in
real - t ime based on each customer’s
music act iv i ty and preference, current
trends as wel l as music compat ib i l i ty
among l isteners (see F igure 4) .
11© Ovum. Unauthorized reproduction prohibited.
Data feed
Hello Tunes usage pattern Social Media Data
Customer lifecycle
Charging Data
S E A R C H
Search Keywords
Demographic profile (KYC)
Rule-based processing
Combines...
... to profile users and deliver an individualized music experience
Customer’sdemographicinformation
Servicetransactional
patterns
Wisdom ofcrowds
In-sessionbehavior+ + +
Integrates with multiple touch points
IVR/IBD/VN SMS/USSD Call center WAP/WEB Search
w w.w
Figure 4. Airtel’s MyLikes - Matching customers and their music preferences
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Source: Mahindra Comviva
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The attractiveness of an offer will be relative to
each user, so the operator has to be able to
either push personalized offers, services and
support to the customer, or help them navigate
their way to appropriate choices and then
facilitate seamless delivery of those choices.
Operators need to investigate the analytics tools
that will allow them to develop data-driven
marketing programs that are fit for purpose in
the digital driven market place. Specialized teams
will review customer profiles and use this as a
basis to assess their propensity to buy certain
products. They can then proactively push a
personalized offer via SMS or email, and live care
agents can use customer data profiles to
recommend the next best offer (NBO). At this
point, the customer should also be made aware
of any additional items they might need in order
to access and use the services – for example a
specific data pack, tariffs plan, minimum speed or
device type.
Analytics can be used to create personalized
tariffs that provide the best value for a customer
without reducing ARPU. Any offers or discounts
can be applied to the most suitable plan and
flexed to suit the customer’s perceived value to
the operators.
Once customer data has been extracted and
analyzed for their own benefit, operators can
offer third parties similar insights. However,
operators need to take care to manage personal
and data privacy issues by aggregating and
anonymizing customer data. Operators cannot
make money from reselling raw personal data.
Sharing or selling on individual customer data can
lead to legal issues, particularly within the
European Union. Privacy policies typically state
that personal information can only be shared
externally with the user’s consent or knowledge,
or if it has been anonymized. This means that
third parties will be able to see data on groups of
customers displaying similar characteristics (for
example a socio-economic or age groups) behave
in certain conditions, but they would not be able
to see an individual's personal information.
Telefonica Dynamic Insights and Verizon’s
Precision Market Insights are two examples
where the operators have resold customers
insights to third parties for marketing purposes
at physical venues. Arguably they both also give
good levels of management and control to
customers.
Exploit upsell opportunities
Managing churn
Getting the basics right
Managing and minimizing churn is a prerequisite
to staying in business. The launch of new
technologies (for example 4G), services, or
devices are event-driven triggers for behavioral
tipping points that are easy to identify. In terms of
the ongoing daily business operation, it is impor-
tant to ensure that customer behavior and usage
patterns are monitored to pick up the more
subtle changes. Operators are then in a position
to program their decision engines to identify and
anticipate churn and action remedies, which will
depend on current and potential value of the
customer.
A leading operator in Sri Lanka, for example, uses
a recharge frequency model (RFM) to score and
segment customers based on transactional value
and profitability. The model takes information
such as the subscriber ID, their total usage, total
number of incoming minutes, their age and so
forth and applies a learning algorithm based on a
decision tree and logistic regression. The output
action could be to allow the customer to churn; to
promote new services and offers to increase
loyalty and grow the customers’ spend or bundle
of services; or they may reward their most
valuable customers.
Preventing churn uses a similar set of inputs to
precision marketing decisions, and can be used
to prevent churn at the end of a contract or
period of credit. Clearly the time to intervene is
not when the customer calls to ask for their
porting authorization code (PAC), but rather it is
better to automatically track the customers’
behavior in the three months prior to the end of
the contract to see whether they have:
made fewer calls and/or not exceed the cost
of their basic bundle
enquired directly about upgrading their
device and/or package
responded to certain offers
searched for new offers, or
made calls to a competitors’ customer
service numbers.
These are a few of the patterns that can be
identified if the operator monitors customer data
(pre-paid customers can merely drop off and the
problem is more acute on account of the
non-contractual nature of prepaid services).
13© Ovum. Unauthorized reproduction prohibited.
This is the next step in the customer-operator
relationship, where the operator allows
customers to control and manage their own data,
and where the operator provides transparency
on how their data is used and shared. For
example, operators could build trust by seeking a
customer’s permission on how to engage with
them (what is their preferred channel and how
frequently do they want to be contacted), which
may increase the amount of personal data that
customers will provide. With the right security
and privacy controls in place, operators
(particularly those in mature markets and with
certain demographic groups) can enhance their
relationships with subscribers. This has been
used to great effect by O2 in the UK for example.
O2’s Priority Moments is an opt-in service that
give customers priority access to O2 sponsored
events.
One aspect that operators do not seem to be
aware of is that generally customers trust them
with their data – certainly more than their OTT
counterparts. Operators have a good opportunity
to obtain more information and data about their
customers, simply by asking them for it!
Give greater management and control to customers
Dimension data packs to support offers to customers
It is important that operators use the customer
data and usage information to ensure that when
a customer signs up to a new service, that they
do indeed have all the components in place to
obtain the service. For example, if the customer
signs for new services and then tries to use it,
only to find that their current plan doesn’t allow
them to activate the service, or they don’t have a
big enough data plan or the necessary speed
available, the customer will be not only be
frustrated and disappointed, but far less likely to
try new services in the future. As soon as a
customer tries to buy a new service, all the
components should be highlighted that they
either need to purchase or order to obtain the
service. This can only be achieved by using
analytics to correlate the customer profile with
the desired services
Right-sizing the operators’ commercial response
14© Ovum. Unauthorized reproduction prohibited.
Appendix
Ovum Consulting
This white paper was researched, authored and produced by Ovum in association with
Mahindra Comviva, as part of a series of papers assessing the current state and future
market direction of mobile broadband services for mobile operators.
About Mahindra ComvivaMahindra Comviva is the global leader in providing mobility solutions. It is a subsidiary of
Tech Mahindra and a part of the USD 16.7 billion Mahindra Group. With an extensive port-
folio spanning mobile finance, content, infotainment, messaging and mobile data solutions,
Mahindra Comviva enables service providers to enhance customer experience, rationalize
costs and accelerate revenue growth. Its mobility solutions are deployed by 130 mobile
service providers and financial institutions in 90 plus countries, transforming the lives of
over a billion people across the world. For more information, please visit
www.mahindracomviva.com.
Ovum has an enviable and hard-earned reputation as a provider of telecoms consult-
ing services. Our consult ing customers tell us that, above all else, it is Ovum's industry
knowledge and at tention to detail that puts us ahead of our competitors. This is
directly related to the expertise of our consultants and analysts, and the project and
research methodologies we use. We work across the globe with business leaders of
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governments and industry regulators. We hope that this analysis wil l help you make
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Ovum’s consult ing team may be able to help you. For more information about Ovum’s
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