analytics, kpis for effective churn & loyalty management
DESCRIPTION
I gave this talk at the TMF event in Dubai in March 2011. it dealt with the significance of direct customer contact enabled by analytics and cascaded KPIs across organization. the presentation focuses on telecom loyalty and churn.TRANSCRIPT
Pakistan Mobile Communications (Pvt.) Limited 1
Using Analytics, KPIs and process management to achieve superior customer contact management, churn reduction and loyalty
TMF Management World Middle East 2011
Ehtisham Rao
Pakistan Mobile Communications (Pvt.) Limited 2
Broad agenda
Pakistan Mobile Communications (Pvt.) Limited 3
Churn in Telcos is a function of size and prepaid proportion
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
0% 20% 40% 60% 80% 100% 120% 140% 160%
Bubble size indicates prepaid subs %
High Churn: Most of these countries are in emerging marketHave high prepaid focus
Low Churn: Mostly high penetration developed market Most have them have smaller prepaid segment
India
Nigeria
China
Egypt
Peru
Brazil
Morocco
Algeria
Pakistan
Philippines
Indonesia*
Japan
South Africa
Belgium
Argentina
Denmark
New – Zeland
SwitzerlandSweden Singapore
Austria
Finland
Market Penetration %
Monthly churn %Monthly Churn %, Penetration and Prepaid % in different countries Q1 2009
Courtesy Capgemini Consulting
Pakistan Mobile Communications (Pvt.) Limited 4
As markets mature, costs shift and so should the focus
Churn on the rise: SAC lowers to give way to more operational space in SRC
Pakistan Mobile Communications (Pvt.) Limited 5
Drivers; lack of discounts, recognition of loyalty
39%
27%
25%
23%
22%
14%
No reward forcontract renewal
New discount notapplied
CC staff unaware ofservice history
In dark about serviceproblem
No continuity in faultresolution
Not enough choices
Top reasons behind voluntary Churn in Telecom What would have prevented Churn
57%
50%
31%
29%
19%
New discountsapplied
Reward for renewingcontract
Continuity in handlingcomplaints
Keep informed aboutservice problem
Provide greaterchoice
Though operators can take reactive measures such as better conflict management capability among their CC staffs to manage churning customer , proactively discount,
renewal reward etc seem to be more effective in churn managementCourtesy Capgemini Consulting
Pakistan Mobile Communications (Pvt.) Limited 6
Loyalty & Churn are flip side of the coin
Business Objectives
Business Transformation
Objectives
Customer Relationship Objectives
Reduce Churn
Increase ARPU
Focus on High Value Customers
Customer Profiling
Improve Customer Experience Delivery
Enable broad communication with Customers
Contribute to Brand Perception
Loya
lty O
bjec
tives Customer Loyalty has a
wide definition that can serve a number of objectives including reduce churn, and increase loyalty, as a rather direct consequence of different programs and campaigns
Pakistan Mobile Communications (Pvt.) Limited 7
Loyalty & Churn in continuumCategories DescriptionHigh-level ActionsPrograms
Visible programs and campaigns to
increase loyalty
• Customer gets information about the scheme
• In most cases, the customer signs-up for participating
Bonus point systems
Tiers and clubs
• Bonuses (based on different usages)
• Find a friend• Direct point systems (operators
services)• Multi-partner point systems• Indirect point systems (3rd
party services)• Lotteries• Incoming calls
• Friends and family & communities
• Tiers• Clubs
1
2
“Behind the scene” churn-
prevention actions
• Basic call related information and customer profiling
• Social network analysis• Customer service behavior• Speech analysis
• Pro-active offers from the operators
• Customer doesn’t know she is part of a “program”
Offers based on ‘Analytics’
3
Pakistan Mobile Communications (Pvt.) Limited 8
Evolution of customer contact management for campaigns
Customer View
Success Rate
Traditional CampaignEnterprise-InitiatedMarketing-Driven Intrusive 3%
Targeted Campaign
RelevantSegment basedMarketing
20%
Timely Interaction
AppropriateEvent drivenRelationship based
40%
Gartner Group 2003
Customer View
Success Rate
Traditional CampaignEnterprise-InitiatedMarketing-Driven Intrusive 3%
Targeted Campaign
RelevantSegment basedMarketing
20%
Timely Interaction
AppropriateEvent drivenRelationship based
40%
Gartner Group 2003
Pakistan Mobile Communications (Pvt.) Limited 9
10 opportunity areas in Customer Lifecycle Management
Courtesy KXEN
Pakistan Mobile Communications (Pvt.) Limited 10
Campaign Management OR Marketing Automation
Managing Campaigns is only part of the Marketing Automation phenomenon
• Open, flexible, business intelligence platform• Powerful descriptive and predictive analytics• Pre-built dashboards, personalized access
• Optimize planning & budgeting• Manage content and approvals• Share best practice templates
• Segmentation and targeting• Campaign design and execution• Outbound, inbound, triggered
• Loyalty Program management• Member profiling and management• Promotions and rules definition
• Multi-channel response capture• Collaborative lead management• Integrated ROI analytics
• Closed loop tracking• Role-based, real time analytics• Continuous learning
LoyaltyManagement &
Execution
Response &LeadManagement
Customer
Campaignsand DialogueManagement
Customer & Business Insight
Marketing AnalyticsPlanning &Resource Management
Plan
Manage
Measure
Understand
Execute
Pakistan Mobile Communications (Pvt.) Limited 11
The components that must all come together
Pakistan Mobile Communications (Pvt.) Limited 12
Strategy / Planning must be integrated with analytics, budgets, and customer engagement data
Customer behavior must be fed back into the marketing planning continuum
The Budget for each campaign must tie in with overall plans and multiple wave execution
Customer engagement must be linked seamlessly in real time with the Marketing planning tools
1
2
3
4
Marketing Automation – The Building Blocks
Marketing automation breaks a linear relationship and results in a continuum of planning and action
Marketing Automation building blocks
Marketing
MarketingPlan/Strategy
Budget/ROI
Customer Engagement
Marketing Analytics
Offer & Price Behavior Results
1
2
3
4
Pakistan Mobile Communications (Pvt.) Limited 13
From Campaign Management to Marketing Automation
Teradata Data
Warehouse
Analytics
Source Data
Billing,Payments, Recharge
Customer information
MarketingInfo
CDRs / Pre- and Postpaid
CRM / Retention
Acquisition
Growth
Retention
Strategic Customer Insight Seamless Customer Experience
Real
Tim
e In
tegr
atio
n
Telemarketing
CallCenter
Sales Contact
Orchestration
Multi-Channel, Single WaveDisparate Campaigns
Automation
Campaign Management Channels
SMS
Segments
SegmentA
Offer B
Channel C
Campaign A
SegmentV
Offer B
Channel C
Campaign B
SegmentC
Offer B
Channel C
Campaign C
Responses
Budget
Missing Components!
Missing Seamless channel integration (feedback) !
Marketing Analytics
MiningModeling
Reporting ProfilingSegmenting
CampaignDesign
Multi-Channel Campaign Automation
CampaignAutomationBudget
Event-Driven Marketing
EnterpriseRules
Real Time Events
Marketing Automation
Pakistan Mobile Communications (Pvt.) Limited 14
Value comes from Analytics indeed!
Pervasive BI built into business processIsolated Power usersReal-time, forward looking insightAfter-the-fact data
Intelligence-driven processes & workflowsReporting results
TOFROM
Analytics driving business valueBI tools
Pakistan Mobile Communications (Pvt.) Limited 15
Marketing action is expanding beyond Query and Reporting support
BI Generation
“Here are your reports”
“Explore my data”
“How well are we meeting targets?”
“What should I do next?”
Driving Performance with Information Requires Transformational use of BI
Incr
easi
ng B
usin
ess
Valu
e
“What should I do now, at the moment of contact?”
Transactional
reporting
Query,
OLAP/DW
KPI
Management
Insight Driven
ActionCampaign
Management
Intelligent
InteractionAuto offer
generation
Mobilink’s Estimated Position in the Automated Process
Pakistan Mobile Communications (Pvt.) Limited 16
Marketing Challenges, the integration ‘island’
Pakistan Mobile Communications (Pvt.) Limited 18
Analytics must supplement the overall Customer contact management strategy
Pakistan Mobile Communications (Pvt.) Limited 19
Analytics roadmap
Pakistan Mobile Communications (Pvt.) Limited 20
Case- Churn suspect engagement and stabilization (loyalty)
Push to Customer
Engage
Stabilize
Ease of Use
15 day cycles introduced from July 1. 2010 onwards:• New triggers in addition to churn propensity introduced• IT-DWH and BAP teams became part of the same process• CMT tool modified to achieve the 15 day cycle
Stabilization Platform
Qualify engaged customers
Results of the 15 day cycle are convincing• Customer response on campaigns triple folded• Complexity and frequency of the campaigns allowed us to see through
patterns• High value customer engagement seems to be significantly more effective• Using KXEN based campaign for low value customers is inefficient
• Challenge is to convert the engaged customers into stable, revenue generating base.
The Stabilization platform is already available to us;
• Customers moved to the platform based on engagement• Rotational customers could also be moved• Offers made are behavioral, for every 100 Rs recharge, 10 free minutes etc• These customers are on the program for one year so no multiple campaigns
required to keep them engaged• In case customers fall out of the stabilization platform, they get detected
again through KXEN otherwise they are moved out of the churn radar
The platform allows for customers to be contacted automatically once thresholds are achieved;
“Dear customer, you have qualified for 10 free offnet minutes with your Rs 100 recharge, kindly SMS the following code to 1234 to receive your voucher”
This point of customer delivery allows for ramp up of rusty high value customers and allows us to study their behavior while in stabilization phase.
SMS on maturity E Vouchers
Marketing Gap Inactivity Period
Offer & Take up
• Special Of net offers
• Bundles on usage threshold
• Free recharge after X AMT recharges
Pakistan Mobile Communications (Pvt.) Limited 21
A complete communication dashboard
Pakistan Mobile Communications (Pvt.) Limited 22
Communication Dashboard Overview
Pakistan Mobile Communications (Pvt.) Limited 23
Value added through each step of the way
Feedback Loop and Automation
Monitoring / KPIs
Business Understanding
Data Understanding .
Analytical Dataset Modelling Deployment
Pakistan Mobile Communications (Pvt.) Limited 24
Cascaded KPIs – the essentials
Pakistan Mobile Communications (Pvt.) Limited 25
Monitoring KPIs- exploded
Pakistan Mobile Communications (Pvt.) Limited 26
Takeaways
Churn has a strong correlation with location.
Churn as a function of distribution channel
Network intelligence cannot be replicated through back office automation
Loyalty programs should look beyond a narrow set of business objectives
Pakistan Mobile Communications (Pvt.) Limited 27
Thank you—any questions?
Ehtisham RaoDirector Business Intelligence & Billing, [email protected]