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HPMC12: Celcom Using analytics for excellent customer lifecycle management
 

HPMC12: Celcom Using analytics for excellent customer lifecycle management

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Presented during the High Performance Marketing Conference 2012, organized by Accenture on February 9th 2012. This presentation was given by Andreas West of Celcom, and looks at how Celcom uses ...

Presented during the High Performance Marketing Conference 2012, organized by Accenture on February 9th 2012. This presentation was given by Andreas West of Celcom, and looks at how Celcom uses analytics for excellent customer lifecycle management.

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    HPMC12: Celcom Using analytics for excellent customer lifecycle management HPMC12: Celcom Using analytics for excellent customer lifecycle management Presentation Transcript

    • High Performance MarketingConference 2012 Using Analytics for Excellent Customer Lifecycle Management Andreas West Senior Vice President - Customer Value Management Celcom Malaysia 1
    • High Performance Marketing Conference 2012Customer Lifecycle Management (CLM) is to drive profitability earlier in the lifecycle, increase the marginof customers as they mature and extend the tenure of profitable customers Customer Lifecycle Join Use Request Support Reconsider Terminate / Discover Sign-Up Activate Use Service Bill & Pay Make Contact Resolve Issue Revaluate Extend CLM Actions to Drive Greater Lifetime Value 5. Extend Revenue through Proactive 3. Intervene to Up-Sell / Retention Treatments Cross-Sell and Drive Revenue With 4. Intervene to Minimize CLM number of Unprofitable 2. Intervene to reduce Customers Costs-to-Serve and Drive Downward MarginProfitability Migration Range of Customer 1. Make customers profitable Profitability faster through Targeted Scenarios - Acquisition and Full Service Take- Without CLM Up 6. Life-stage and profile based treatments to match customers needs and increase loyalty Customer Lifetime 2
    • High Performance Marketing Conference 2012Customer Lifecycle Management shifts the focus from “To Whom can I sell this ?” to “What is relevant toYou ?” Traditional Marketing “I have an offer …” “…let me find the best group of people to tell about it.” Traditional Batch Campaign CLM Marketing “I have a customer …” “… let me find the best relevant treatment for this customer at the moments and channel he prefers.” Event Based Campaign (…) 3
    • High Performance Marketing Conference 2012Understand customers’ behaviour is the fundamental of Customer Lifecycle Management Customer SegmentationHigh CS05 – Loyal Old Folks CS04 – East Malaysian • Mid Revenue Loss Chinese Churners per month • High Revenue Loss • Age 58 to 108 per month • Northern, Malay • Old Price Plan CS01 • Low SMS • No Call Bar ARPU (RM) CS02 CS04 CS06 – High Value 1+5 CS03 • Low Revenue Loss per month CS05 • Malay Tenure (Months) CS06 • LOS 3 to 29 months CS07 • Child Account • Call Barred > 3Low (Bubble Size = Segment Count) New joiner Loyalist 4
    • High Performance Marketing Conference 2012 In addition to behaviour, customers’ needs drive the design of customer lifecycle management The World In My Hands Playing Pushing the Discipline boundaries around Time out Pleasure from the world Bonding Seeking Maintaining Pimping Unleashing Continuous Thrill of the New Connection Routines Rewarding Exploring Holding on Life management Being in the loop Acceptance Driving Availability Keeping up changeSource: HuNeedsTM model, mext System & Strategies 5
    • High Performance Marketing Conference 2012 Based on customers’ needs, five telecommunication market types are derived The World In My Hands Playing Pushing the Control & Bonding Discipline boundaries Power Players around Time out Pleasure from the world Bonding Seeking Maintaining Pimping Unleashing Continuous Thrill of the New Connection Routines Rewarding Exploring Progress Managers Keeping Up Holding on Life management Being in the loop Socialites Acceptance Driving Availability Keeping up changeSource: HuNeedsTM model, mext System & Strategies 6
    • High Performance Marketing Conference 2012 A/B Testing What is A/B testing? Benefits: • Samples from 2 or more customer-group are given the same offer • Provides data-based insights • A metric defines success • Non-differentiable by customers • The group exhibiting more success is selected for real-world use • Low risk & cheaper test approach Examples 1. Putting human photos on a website increased 2. Adding “It’s free” increased the clicks on the sign-up conversion rates by as much as double 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 Magazinehttp://www.smashingmagazine.com/2010/06/24/the-ultimate-guide-to-a-b-testing/ 7
    • High Performance Marketing Conference 2012Intelligence gained out of A/B testing campaigns was built into future campaigns to generate higherresponse rates March’10 Bonus Campaign – Reload & Use RM - Campaign Mechanics: Response in the two phases was studied: • Reload and use RM- – Get -% bonus on next reload • ARPU < - – The campaign has positive impact • ARPU - - - – The campaign is not effective Take Up Rate by ARPU bands Campaign Take Up Control Group Take Up 8
    • High Performance Marketing Conference 2012Intelligence gained out of A/B testing campaigns was built into future campaigns to generate higherresponse rates 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 Take Up Rate by SMS Language English Chinese SMS Text Language Target Base Take up Take Up Rate 9
    • High Performance Marketing Conference 2012Traditional loyalty program, given all customers via ATL, impose high financial burden to Telco operators,with low ability to address churn Incremental Value (Losses) From Loyalty Program Phone Only Redemption (RM’000 000) 10
    • High Performance Marketing Conference 2012Predictive modeling improves the accuracy of target identification, thus reducing the wastage ofcampaign funds The scoring model correctly identified -% of As a result, the scoring model reduces churners versus only -% without model campaign funds wastage by -% Model Effectiveness on Identifying Churn Model Effectiveness on Reducing Wastage Count (RM ‘000) Wastage (With Wastage (Without Savings Model) Model) Churners With Model Without Model 11
    • High Performance Marketing Conference 2012Offer matrix is used to optimize customer’s investment based on both their historical lifetime value. Thisallows 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 E.g. Postpaid High-Risk Offer Matrix Tenure bands value & behavior 12
    • High Performance Marketing Conference 2012 The mobile operators top the rank of Ad Spend in Malaysia, but… Rank Top 10 Adspend by Brand Feb’11 (RM’000) (Ranked by Feb’11) 1 Celcom - 2 KFC - 3 McDonald’s - 4 Maxis - 5 Maybank - 6 Digi - 7 Canon - 8 Wall’s - 9 Sunsilk - 10 TM -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 Market Share by Revenue (RM) Market Share by EBITDA (RM) Market Share (%) Market Share (%) 2007 2008 2009 2010 2007 2008 2009 2010 Maxis Celcom DigiSource: Ovum 14
    • High Performance Marketing Conference 2012This is caused by the fragmentation in the media as the channels exploded in the recent years 15
    • High Performance Marketing Conference 2012 This is further hampered by the market saturation and declining ARPUs Malaysia Mobile Penetration Rate and Industry ARPU Mobile Penetration Rate (%) Mobile Industry ARPU (RM) 2008 2009 2010 2011 2012 2013 2014 2015 No of Mobile Phone Subscribers/100 Inhabitants Mobile Industry ARPUSource: 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 Growth of Prepaid/Postpaid Connections Connections (‘000) Growth(%) 2009 2010 2011 2012 2013 2014 2015 Prepaid Connections Postpaid Connections Connection GrowthSource: Ovum 17
    • High Performance Marketing Conference 2012 Consumers trust their friends & relatives the most, out of all the available channels and information sourcesSource: Nielsen Trust and Advertising Global Report July09http://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 networkSource: Product adoption networks and their growth in a large mobile phone network, IEEE ASONAM 2010http://www.sundsoy.com/asonam_product_spreading.pdf 19
    • High Performance Marketing Conference 2012Executive 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) 20
    • High Performance Marketing Conference 2012What does it look like in the future 21
    • High Performance MarketingConference 2012 Q&A 22
    • High Performance Marketing Conference 2012Andreas WestSVP Customer ManagementCelcom Axiata BerhadEmail: andreas.west@celcom.com.myTwitter: A4XRBJ1 23