Analytics, KPIs for effective Churn & Loyalty management

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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 …

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.

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  • 1. Using Analytics, KPIs and process management to achieve superior customer contact management, churn reduction and loyalty Ehtisham Rao TMF Management World Middle East 2011Pakistan Mobile Communications (Pvt.) Limited 1
  • 2. Broad agenda A look at Loyalty and Churn in Telcos Aligning and modeling the customer contact strategy Case based review of cascaded KPIs and metricsPakistan Mobile Communications (Pvt.) Limited 2
  • 3. Churn in Telcos is a function of size and prepaid proportion Monthly Churn %, Penetration and Prepaid % in different countries Q1 2009 Monthly churn % 7.00% High Churn: 6.00% Most of these countries are in emerging market Pakistan Have high prepaid focus Philippines South Africa 5.00% Low Churn: Indonesia* Mostly high 4.00% Morocco penetration developed China Denmark market Most have them have Nigeria Peru 3.00% Argentina smaller prepaid Brazil segment Egypt 2.00% New – Austria India Belgium Zeland Algeria Finland 1.00% Japan Sweden Singapore Switzerland 0.00% 0% 20% 40% 60% 80% 100% 120% 140% 160% Market Penetration % Bubble size indicates prepaid subs % Courtesy Capgemini ConsultingPakistan Mobile Communications (Pvt.) Limited 3
  • 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 SRCPakistan Mobile Communications (Pvt.) Limited 4
  • 5. Drivers; lack of discounts, recognition of loyalty Top reasons behind voluntary Churn in Telecom What would have prevented Churn Not enough choices 14% Provide greater choice 19% No continuity in fault resolution 22% Keep informed about service problem 29% In dark about service problem 23% Continuity in handling complaints 31% CC staff unaware of 25% service history Reward for renewing contract 50% New discount not applied 27% New discounts applied 57% No reward for 39% contract renewal 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 management Courtesy Capgemini ConsultingPakistan Mobile Communications (Pvt.) Limited 5
  • 6. Loyalty & Churn are flip side of the coin Reduce Churn Business Objectives Increase ARPU Loyalty Objectives Focus on High Value Customers Customer Loyalty has a wide definition that can serve a number of objectives including Business reduce churn, and increase Transformation Customer Profiling loyalty, as a rather direct Objectives consequence of different programs and campaigns Improve Customer Experience Delivery Enable broad communication with Customer Customers Relationship Objectives Contribute to Brand PerceptionPakistan Mobile Communications (Pvt.) Limited 6
  • 7. Loyalty & Churn in continuum Categories Programs High-level Actions Description 1 • Bonuses (based on different usages) • Find a friend • Direct point systems (operators Bonus point services) systems • Multi-partner point systems • Indirect point systems (3rd • Visible programs party services) Customer gets information about and campaigns • Lotteries the scheme to increase • Incoming calls • In most cases, the customer signs-up loyalty for participating 2 • Friends and family & Tiers and communities clubs • Tiers • Clubs 3 • Basic call related information “Behind the and customer profiling • Pro-active offers from the operators scene” churn- Offers based • Social network analysis • Customer doesn‟t prevention on „Analytics‟ • Customer service behavior know she is part of actions • Speech analysis a “program”Pakistan Mobile Communications (Pvt.) Limited 7
  • 8. Evolution of customer contact management for campaigns Customer Success View Rate Traditional Campaign Enterprise-Initiated Marketing-Driven Intrusive 3% Targeted Campaign Segment based 20% Relevant Marketing Timely Interaction Event driven Appropriate 40% Relationship based Gartner Group 2003Pakistan Mobile Communications (Pvt.) Limited 8
  • 9. 10 opportunity areas in Customer Lifecycle Management Courtesy KXENPakistan Mobile Communications (Pvt.) Limited 9
  • 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 Customer & Business • Pre-built dashboards, personalized access Insight • Optimize planning & budgeting • Manage content and approvals • Share best practice templates Planning & Marketing Analytics Resource • Closed loop tracking Management • Role-based, real time analytics • Continuous learning Manage Understand • Segmentation and targeting Customer Measure Plan • Campaign design and execution • Outbound, inbound, triggered Execute Response & Campaigns Lead and Dialogue Management Management • Multi-channel response capture • Collaborative lead management • Integrated ROI analytics Loyalty Management & Execution • Loyalty Program management • Member profiling and management • Promotions and rules definitionPakistan Mobile Communications (Pvt.) Limited 10
  • 11. The components that must all come togetherPakistan Mobile Communications (Pvt.) Limited 11
  • 12. Marketing Automation – The Building Blocks Marketing Automation building blocks 1 Strategy / Planning 1 must be integrated Marketing with analytics, Plan/Strategy budgets, and customer engagement data 4 2 2 Customer Marketing automation Marketing Customer engagement must be breaks a linear Marketing Analytics Engagement linked seamlessly in relationship and results real time with the in a continuum of Marketing planning planning and action tools 3 3 The Budget for each Budget/ROI campaign must tie in with overall plans and multiple wave execution 4 Customer behavior must be fed back Offer & Price Behavior Results into the marketing planning continuumPakistan Mobile Communications (Pvt.) Limited 12
  • 13. From Campaign Management to Marketing Automation Seamless Customer Strategic Customer Insight Experience Source Data Marketing Automation Campaign Management Channels Segments Billing,Payments, Teradata Marketing Analytics Multi-Channel, Single Wave Recharge Tele Data Disparate Campaigns marketing Real Time Integration Warehouse Campaign A Mining Reporting Profiling Customer Modeling Segment Offer Segmenting Channel Call Retention information A B C Center Multi-Channel Campaign Campaign B Automation Sales Marketing Segment V Offer B Channel C Contact Info Campaign Campaign C Campaign Acquisition Budget Design Automation E-mail Segment Offer Channel C B C CDRs / Pre- and Postpaid Event-Driven Marketing SMS Analytics CRM / Retention Budget Time Real Events Enterprise Orchestration Automation Missing Seamless channel Growth Rules integration (feedback) ! Missing Components! ResponsesPakistan Mobile Communications (Pvt.) Limited 13
  • 14. Value comes from Analytics indeed! FROM TO Isolated Power users Pervasive BI built into business process After-the-fact data Real-time, forward looking insight Reporting results Intelligence-driven processes & workflows BI tools Analytics driving business valuePakistan Mobile Communications (Pvt.) Limited 14
  • 15. Marketing action is expanding beyond Query and Reporting support Driving Performance with Information Requires Transformational use of BI “What should I do now, at the moment of contact?” Increasing Business Value “What should I do next?” “How well are we meeting targets?” “Explore my data” “Here are your reports” BI GenerationPakistan Mobile Communications (Pvt.) Limited 15
  • 16. Marketing Challenges, the integration ‘island’ Micro / Macro Execution Product Portfolio Offer Response Management VISIBILITY Dashboards Fine Tuning ROI Analysis Calendars BudgetPakistan Mobile Communications (Pvt.) Limited 16
  • 17. Analytics must supplement the overall Customer contact management strategyPakistan Mobile Communications (Pvt.) Limited 18
  • 18. Analytics roadmapPakistan Mobile Communications (Pvt.) Limited 19
  • 19. Case- Churn suspect engagement and stabilization (loyalty) Offer & Take up 15 day cycles introduced from July 1. 2010 onwards: • New triggers in addition to churn propensity introduced Marketing Gap Inactivity Period • IT-DWH and BAP teams became part of the same process • CMT tool modified to achieve the 15 day cycle 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 Engage • 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; Qualify engaged customers • Customers moved to the platform based on engagement • Special Of net • Rotational customers could also be moved offers • Offers made are behavioral, for every 100 Rs recharge, 10 free minutes etc Stabilize Stabilization Platform • Bundles on • These customers are on the program for one year so no multiple campaigns usage threshold required to keep them engaged • Free recharge • In case customers fall out of the stabilization platform, they get detected after X AMT again through KXEN otherwise they are moved out of the churn radar recharges Push to Customer The platform allows for customers to be contacted automatically once thresholds are achieved; Ease of Use “Dear customer, you have qualified for 10 free offnet minutes with your Rs 100 SMS on maturity E Vouchers 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.Pakistan Mobile Communications (Pvt.) Limited 20
  • 20. A complete communication dashboardPakistan Mobile Communications (Pvt.) Limited 21
  • 21. Communication Dashboard OverviewPakistan Mobile Communications (Pvt.) Limited 22
  • 22. Value added through each step of the way Feedback Loop and Automation Business Data Analytical Modelling Deployment Understanding Understanding . Dataset Monitoring / KPIsPakistan Mobile Communications (Pvt.) Limited 23
  • 23. Cascaded KPIs – the essentials Company Mission Corporate Corporate Corporate Priority 1 Priority 2 Priority 3 Analytic Analytic Analytic Analytic Activity 1.1 Activity 1.2 Activity 2.2 Activity 3.1 KPI1 KPI2 KPI 1 KPI 2 KPI 1Pakistan Mobile Communications (Pvt.) Limited 24
  • 24. Monitoring KPIs- exploded R.O.I $$$ Identification of Offer Churners Accuracy Robustness Contactability Attractiveness Data Time $$ Offer vs richness Horizon Invested ProfilePakistan Mobile Communications (Pvt.) Limited 25
  • 25. 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 objectivesPakistan Mobile Communications (Pvt.) Limited 26
  • 26. Thank you—any questions? Ehtisham Rao Director Business Intelligence & Billing, Mobilink +00923008499114 ehtisham.r@mobilink.netPakistan Mobile Communications (Pvt.) Limited 27