HPMC12: Celcom Using analytics for excellent customer lifecycle management
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Transcript of HPMC12: Celcom Using analytics for excellent customer lifecycle management
High Performance Marketing Conference 2012
Using Analytics for Excellent
Customer Lifecycle Management
Andreas West Senior Vice President - Customer Value Management
Celcom Malaysia
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High Performance Marketing Conference 2012
Customer Lifecycle
Discover
Join
Sign-Up Activate
Use Request Support
Use Service Bill & Pay
Reconsider
Make Contact
CLM Actions to Drive Greater Lifetime Value
Resolve Issue Revaluate Terminate /
Extend
Customer Lifetime
1. Make customers profitable faster through Targeted
Acquisition and Full Service Take-Up
Pro
fita
bili
ty Downward
Migration
2. Intervene to reduce Costs-to-Serve and Drive
Margin
3. Intervene to Up-Sell / Cross-Sell and Drive
Revenue
5. Extend Revenue through Proactive
Retention Treatments
With CLM
Range of Customer
Profitability Scenarios -
Without CLM
4. Intervene to Minimize number of Unprofitable
Customers
6. Life-stage and profile based treatments to match customers needs and increase loyalty
Customer Lifecycle Management (CLM) is to drive profitability earlier in the lifecycle, increase the margin of customers as they mature and extend the tenure of profitable customers
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High Performance Marketing Conference 2012
Customer Lifecycle Management shifts the focus from “To Whom can I sell this ?” to “What is relevant to You ?”
Traditional Marketing
“I have an offer …” “…let me find the best group of people to tell about it.”
Traditional Batch Campaign
“I have a customer …” “… let me find the best relevant treatment for this customer at the moments and channel he prefers.”
CLM Marketing
Event Based Campaign
(…)
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High Performance Marketing Conference 2012
High
AR
PU
(R
M)
Tenure (Months)
Low (Bubble Size = Segment Count)
CS04
CS05
CS07
CS06
CS03
CS01
CS02
Understand customers’ behaviour is the fundamental of Customer Lifecycle Management
CS04 – East Malaysian Chinese Churners • High Revenue Loss
per month • Old Price Plan • No Call Bar
CS05 – Loyal Old Folks • Mid Revenue Loss
per month • Age 58 to 108 • Northern, Malay • Low SMS
CS06 – High Value 1+5 • Low Revenue Loss
per month • Malay • LOS 3 to 29 months • Child Account • Call Barred > 3
New joiner Loyalist
Customer Segmentation
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High Performance Marketing Conference 2012
Continuous Connection
Discipline Pushing the boundaries
Playing around
Time out from the world
Maintaining
Pleasure Seeking
Pimping
Routines Exploring
Life management
Acceptance Driving change
Availability Keeping up
Being in the loop
Holding on
Bonding
Unleashing
Rewarding
The World In My Hands
System & Strategies
Thrill of the New
In addition to behaviour, customers’ needs drive the design of customer lifecycle management
Source: HuNeedsTM model, mext 5
High Performance Marketing Conference 2012
The World In My Hands
System & Strategies
Thrill of the New Continuous Connection
Discipline Pushing the boundaries
Playing around
Time out from the world
Maintaining
Pleasure Seeking
Pimping
Routines Exploring
Life management
Acceptance Driving change
Availability Keeping up
Being in the loop
Holding on
Bonding
Unleashing
Rewarding
Control & Bonding
Keeping Up
Power Players
Progress Managers
Socialites
Based on customers’ needs, five telecommunication market types are derived
Source: HuNeedsTM model, mext 6
High Performance Marketing Conference 2012
A/B Testing
What is A/B testing?
• Samples from 2 or more customer-group are given the same offer
• A metric defines success
• The group exhibiting more success is selected for real-world use
1. Putting human photos on a website increased conversion rates by as much as double
Examples
2. Adding “It’s free” increased the clicks on the sign-up button by -%
3. Simply changing the color of the sign-up button from green to red increased conversion rate by -%
Source: The Ultimate Guide To A/B Testing, Smashing Magazine http://www.smashingmagazine.com/2010/06/24/the-ultimate-guide-to-a-b-testing/
• Provides data-based insights
• Non-differentiable by customers
• Low risk & cheaper test approach
Benefits:
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High Performance Marketing Conference 2012
Intelligence gained out of A/B testing campaigns was built into future campaigns to generate higher response rates
March’10 Bonus Campaign – Reload & Use RM -
Take Up Rate by ARPU bands
Campaign Take Up Control Group Take Up
Response in the two phases was studied:
• ARPU < - – The campaign has positive impact
• ARPU - - - – The campaign is not effective
Campaign Mechanics:
• Reload and use RM- – Get -% bonus on next reload
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High Performance Marketing Conference 2012
Intelligence gained out of A/B testing campaigns was built into future campaigns to generate higher response rates
English Chinese
SMS Text Language
Take Up Rate by SMS Language
Target Base Take up Take Up Rate
Test Campaign on Chinese Subs • Daily, 888th customer to reload RM30 to win Ang Pow
(Jackpot) worth RM888
• Promotion around Chinese New Year
• SMS broadcast in English & Chinese
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High Performance Marketing Conference 2012
(RM’000 000)
Incremental Value (Losses) From Loyalty Program
Traditional loyalty program, given all customers via ATL, impose high financial burden to Telco operators, with low ability to address churn
Phone Only Redemption
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High Performance Marketing Conference 2012
Predictive modeling improves the accuracy of target identification, thus reducing the wastage of campaign funds
Wastage (WithModel)
Wastage (WithoutModel)
Savings(RM
‘000
)
Model Effectiveness on Reducing Wastage
As a result, the scoring model reduces campaign funds wastage by -%
The scoring model correctly identified -% of churners versus only -% without model
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Churners With Model Without Model
Co
un
t
Model Effectiveness on Identifying Churn
High Performance Marketing Conference 2012
Offer matrix is used to optimize customer’s investment based on both their historical lifetime value. This allows us to invest more money in ‘good’ high-value long-tenured customers and reduce investment in ‘bad’ low-value high churn risk customers.
Value Segments combining value & behavior
Tenure bands E.g. Postpaid High-Risk Offer Matrix
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High Performance Marketing Conference 2012
Rank Top 10 Adspend by Brand (Ranked by Feb’11)
Feb’11 (RM’000)
1 Celcom -
2 KFC -
3 McDonald’s -
4 Maxis -
5 Maybank -
6 Digi -
7 Canon -
8 Wall’s -
9 Sunsilk -
10 TM -
The mobile operators top the rank of Ad Spend in Malaysia, but…
Source: Nielsen Advertising Information Services (AIS) http://www.aaaa.org.my/resources/2011resources_002.html 13
High Performance Marketing Conference 2012
This advertising arms race have proven to be a zero sum game; market shares by revenue and profit have remained stagnant
Source: Ovum
Maxis Celcom Digi
2007 2008 2009 2010
Mar
ket
Shar
e (%
)
Market Share by Revenue (RM)
2007 2008 2009 2010
Mar
ket
Shar
e (%
)
Market Share by EBITDA (RM)
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High Performance Marketing Conference 2012
This is caused by the fragmentation in the media as the channels exploded in the recent years
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High Performance Marketing Conference 2012
2008 2009 2010 2011 2012 2013 2014 2015
Mo
bile
Ind
ust
ry A
RP
U (
RM
)
Mo
bile
Pen
etra
tio
n R
ate
(%)
Malaysia Mobile Penetration Rate and Industry ARPU
No of Mobile Phone Subscribers/100 Inhabitants Mobile Industry ARPU
This is further hampered by the market saturation and declining ARPUs
Source: Business Monitor International Malaysia Telecommunications Report Q2 2010 16
High Performance Marketing Conference 2012
Mobile operators tried to mitigate the impact of declining ARPUs through increased acquisitions, only to find falling growth rates
2009 2010 2011 2012 2013 2014 2015
Gro
wth
(%)
Co
nn
ecti
on
s (‘
000
)
Growth of Prepaid/Postpaid Connections
Prepaid Connections Postpaid Connections Connection Growth
Source: Ovum 17
High Performance Marketing Conference 2012
Consumers trust their friends & relatives the most, out of all the available channels and information sources
Source: Nielsen Trust and Advertising Global Report July09 http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/07/trustinadvertising0709.pdf 18
High Performance Marketing Conference 2012
Social network is used to drive the adoption of iPhone in a large Norwegian mobile operator
Figure 2. Time evolution of the iPhone adoption network
The data showed that -% of the iPhone users communicated with at least one other iPhone user, which speaks of the social nature of technology consumption.
Figure 1. iPhone Q4 2007 adoption network
Source: Product adoption networks and their growth in a large mobile phone network, IEEE ASONAM 2010 http://www.sundsoy.com/asonam_product_spreading.pdf 19
High Performance Marketing Conference 2012
Executive Summary
1. Use Customer-Segmentation to identify their needs (Customer Centric vs. Product Centric Marketing)
2. Test, Test, Test !!! Do lots of A/B testing to refine your campaigns, offers, channels, language etc.
3. Use Analytics to optimize your investment
4. ATL vs. BTL - Traditional vs. New Market Model (There is need for analytical CMOs)
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Andreas West SVP Customer Management Celcom Axiata Berhad Email: [email protected] Twitter: A4XRBJ1