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Page 1: Customer data driven marketing for digital services€¦ · data-driven marketing programs that are fit for purpose. Market context The importance of digital services Digital services

Customer data drivenmarketing for digital services

Page 2: Customer data driven marketing for digital services€¦ · data-driven marketing programs that are fit for purpose. Market context The importance of digital services Digital services

2© Ovum. Unauthorized reproduction prohibited.

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

Page 3: Customer data driven marketing for digital services€¦ · data-driven marketing programs that are fit for purpose. Market context The importance of digital services Digital services

3© Ovum. Unauthorized reproduction prohibited.

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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4© Ovum. Unauthorized reproduction prohibited.

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.

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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.

5© Ovum. Unauthorized reproduction prohibited.

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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.

6© Ovum. Unauthorized reproduction prohibited.

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

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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.

7© Ovum. Unauthorized reproduction prohibited.

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

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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.

8© Ovum. Unauthorized reproduction prohibited.

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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

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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 .

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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

11© Ovum. Unauthorized reproduction prohibited.

Source: Mahindra Comviva

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12© Ovum. Unauthorized reproduction prohibited.

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

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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.

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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.

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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

telecoms operators, service providers and ICT vendors and with investment banks,

governments and industry regulators. We hope that this analysis wil l help you make

informed and imaginative business decisions. If you have fur ther requirements,

Ovum’s consult ing team may be able to help you. For more information about Ovum’s

consult ing capabil it ies, please contact us directly at consult [email protected].

DisclaimerAll Rights Reserved.No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical,

photocopying, recording, or otherwise, without the prior permission of the publisher, Ovum (an Informa business).

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings,

conclusions, and recommendations that Ovum delivers will be based on information gathered in good faith from both primary and secondary

sources, whose accuracy we are not always in a position to guarantee. As such Ovum can accept no liability whatever for actions taken based

on any information that may subsequently prove to be incorrect.