Why is Mobile the most important customer channel in  Africa ?

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Why is Mobile the most important customer channel in Africa ?

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Why is Mobile the most important customer channel in ...

Why is Mobile the most important customer channel in
Africa ?

A presentation given in Banking Channel Management Conference in August 2013

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  • 1. Yaron Assabi yaron@dsg.co.za Why is Mobile the most important customer channel in Africa ?
  • 2.   Hidden  Agenda   ü  Mobile has the highest reach and is the most rich channel for customer insight ü  Low cost service channel ü  Enhanced security for Banking ü  Personalisation ü  Mobile Loyalty
  • 3. Banking Evolution “ Banking is not some place you go, banking is something you do! “ ~ Brett King, author Bank 2.0 The future of banking will be almost entirely about mobility , as mobile devices are the most pervasive medium in Africa .
  • 4. ü  Social , Local & Mobile convergence is poised to create a truly original and markedly customer-driven banking experience. ü  The commoditization of products within the industry is making it very difficult to compete on price. ü  New entrants such as Google and PayPal are experienced in building online relationships and are used to developing and marketing transparent products. ü  In order to compete Banks need to engage the customer and create Loyalty based on customer insight and personalisation, which make mobile the most rich & cost effective channel of choice
  • 5. PayPal’s New App – Pay with your face Source : eNCA www.youtube.com http://www.youtube.com/watch?v=5NHrDlNnR6U
  • 6. Simple Value Chain Complex Value Chain FinancialInstitution TelecomOperator Convergence of the South African mobile transactional space is very evident, with players from both sides of the spectrum converging to compete for ownership of mobile customers for transactional services The potential threat for financial services companies in terms of being disintermediated in the micro to medium transactional space has however become very evident, with mobile networks increasingly expanding their footprint outside of the mobile space, offering •  Airtime sales •  Short term insurance •  Mobile payment services and •  Micro payments A large degree of mobile banking usage is centered around airtime purchase and transfer. An increasing use of digital channels amongst mobile telecommunications operators implies a direct threat to Banks digital channel strategy & customer ownership becomes increasingly more important. Telecom & Financial Services Overlaps & Trends
  • 7. Airtime Purchases 74% Payments 15% Other 11% The single most popular transactional service in cellphone banking remains airtime purchases, with 74% of customers using it for this purpose, and only 15% paying accounts via their phones. Airtime purchases dominate the use of mobile banking applications, followed by airtime transfer, Rural users (69%) Urban users (51%) Mobile purchases of Prepaid Electricity Rural Users (33%) Urban users (21%) Money Transfer Rural users (44%) Urban users (34%) Prepaid vs Contract usage Rural Users (94%) Urban Users (80%) Average mobile spend across SA population* Prepaid (R165) Postpaid (R387) Internet Access across South Africa •  59% of South Africans have Internet access, •  5% access it on a PC only, •  27% on a mobile phone, •  27% has access to the Internet through a combination of mobile and PC. •  Only 13% of rural areas have Internet access on a PC, •  61% of rural areas that have Internet access on a mobile phone. Source: Arthur Goldstuck, World Wide Worx, Mobility 2012 research study * These figures are across the South African mobile consumer base and therefore indicative only. Airtime Purchases dominate mobile banking
  • 8. Added by Craig Wilson on 20 May 2013. Saved under In-depth, Top Tags: Beyond Payments, DStv, GSM Association, GSMA, Herman Singh, MultiChoice, ODM, On Digital Media, Shameel Joosub, Standard Bank, TopTV, Vodacom TweetTweet 5 2 Shameel Joosub Vodacom expects demand for data to offset a decline in voice revenues in the next few years, but with the margins on data slimmer and the price of data being driven down by a competitive market, the operator is also hoping so-called “over-the-top” services — content, social networking and financial services are three examples — preserve margins and ensure demand for data continues to grow. In South Africa, total data traffic on Vodacom’s network has increased 40% year on year, according to group CEO Shameel Joosub, with average monthly data usage per smartphone user now at 139MB. Joosub says data growth will offset revenue declines and the operator “should be able to continue to expanding margins”. “Data doesn’t dilute margins in any way. Our margins are still expanding slightly in South Africa,” he says. Almost a third of group service revenue (that is, revenue from subscribers using Connect with TechCentral Follow TechCentral on Twitter Connect with TechCentral on F Connect with TechCentral on G Latest Tweets 2 Like Vodacom expects demand for data to offset a decline in voice revenues in the next few years, but with the margins on data slimmer and the price of data being driven down by a competitive market, the operator is also hoping so-called "over-the-top" services - content, social networking and financial services are three examples - preserve margins and ensure demand for data continues to grow.” ~Shameel Joosub, CEO Vodacom * MFS – Mobile Financial Services – TechCentral Article, 20 May 2013 Recent Statement from Vodacom re: MFS
  • 9. Hypothesis vs. Agenda"
  • 10. CUSTOMERS x USAGE x TENURE SALES ACQUISITION COST + COST TO SERVE SUCCESS FORMULA = How many customers would you acquire? How much do they spend with Bank? How long will they stay with Bank ? What does it cost to acquire a new customer? What does it cost to serve a customer? ! Unique CVP based on Customer Segmentation
  • 11. INCLUSIVE PERSONAL BUSINESS MIGRATE CUSTOMERS TO DIGITAL CHANNELS Competitive Offerings Target Market Needs & Wants Ease of Implementation in each segment Cost of Implementation in each segment Organizational Constraints within each segment Strategic Importance in each segment Market Trends SBSA SWOT Traditional Mobile Behavior ! Unique CVP based on Customer Segmentation
  • 12. Posteitaliane, the Italian postal service, launched the Poste mobile service in Nov 2007 on the Vodafone network and has grown into the biggest MVNO in Italy with over 50% of the MVNO market share Source: Nereo Financial Institutions & MVNOs Analysis Document, 2010 Posteitaliane MVNO Case Study
  • 13. Postemobile charges users transaction fees on the MFS operations thereby increasing its customer wallet-share. Source: Nereo Financial Institutions & MVNOs Analysis Document, 2010 Posteitaliane Integrated core banking & mobile proposition =Posetmobile
  • 14. ü  Ownership of the customer brand relationship is an imperative to drive single-account and single SIM usage ü  Control over the customer experience has a direct bearing on the above, as it drives not only the customer perception but adoption of technologies and indirectly acquisition ü  Ownership of the customer base is equally important, as the cost of acquisition & cost to serve is an investment into an asset traditionally handed over to other parties ü  Proposition differentiation drives the consumer perception and acquisition/usage. The Digital Channel proposition therefore directly affects the overall brand perception ü  Operational (& technical) flexibility in a rapidly changing industry is important to ensure the maintainence of differentiated position, as well as to accommodate existing initiatives within the bank ü  Commercial Model flexibility informs both differentiation capability and profitability overall ü  Investment Requirement is important ultimately as it may restrict future agility. ü  Dependency on network relationship is self explanatory, as networks will become direct competitors in terms of digital channel functionality and core products and services. CEM Critical Success Factors in a blurred environment
  • 15. ü  Banking + loyalty into a SIM card to keep relationship with your customers beyond the traditional banking / loyalty card. ü  A personalized menu to drive use of brand content ü  An opportunity to push personalized smartMessage Mobile apps Bank Points Insurance Get Closer to your customers through a branded SIM Card and /or SmartPhone Source : Gemalto Smart Message
  • 16. The Next Big Thing in Mobile Source : Business Insider
  • 17. T –Commerce –Multiple Screens Source : eConsultancy
  • 18. Source: http://econsultancy.com/uk/reports/the-progression-of-agency-value Bigger idea Simple idea Big idea Keep these front of mind Progression of agency value
  • 19. Mobile Plays a key role in every step of path to purchase
  • 20. NPR slide" UI & UX Critical to the Customer path to purchase
  • 21. Personalized messaging & menu options, relating to the subscriber package and profile. Live Chat with Customer Care.View Usage for the month. Access ODP Apps & Content. Recharge using Credit/ Debit Card with PIN Manage Your Phone/ Bank Customer Experience- ODP / Self Care
  • 22. ü  Mobile meeting & services directory ü  Video chat on the go & webinars on financial products & services ü  Cutting edge video collaboration experience from your mobile device Mobile Video Chat with your Personal Banker "
  • 23. Mobile  Marke0ng   Mobile  Customer  Service   Know  your  customers   Know  their  problems   Proac5ve  help  where  needed   Know  your  customers   Know  their  preferences   Give  them  more  of   what  they  want   Real-­‐5me  knowledge   Targeted  adver5sing   Enhanced  brand  loyalty   Business Value
  • 24. ü  It is now recognised by the industry and brands that a large portion of the marketing budget ( 25-50% ) should be spent on mobile. ü  We forecast that in Africa over the next few years the majority of marketing spend will migrate to mobile as brands recognise the effectiveness and ROI . ü  Mobile advertsing is seen by brands as a way to make products and services more affordable for low ARPU customers ( “Freemium Model“), and a way to retain them longer . ü  “More value for money for the attention span” Mobile Advertising
  • 25. Mobile Web Browsing Incentive Plan Pay as You go Mobile Internet ¥  Attract new data users with time-based access ¥  Offer “no commitment” trials ¥  Promote new ways to access content Launch Pad for new services ¥  Promote new services without big media campaigns ¥  Offer services based on triggers such as URL, content type, user profile, and others Targeted Mobile Advertising ¥  Use sign-up pages for advertising: “This service is brought to you by Cape Times” ¥  Offer discounts for services in exchange for advertising ! !
  • 26. MY CREDIT Bad debt Demographics Average balance MY PERSONAL DATA MY STUFFMY IDENTIFIERS MY INTERACTIONS MY RELATIONSHIPS MY CONTEXT MY DEVICES Name Address Gender Profile Preferences SIM SoftSIM Serial NumberDevice details Number SIP Number IP Address Location Presence On/OffRoaming Pictures Videos CalendarAddress Book Bank School Friends Workplace Browsing History .mobi domains QR Codes A wealth of untapped data for Personalisation
  • 27. PERFORMANCE GUARANTEE… DIFFICULTIES OF REACH CAPACITY IN A COMPLEX ENVIRONMENT TARGETING CAPACITY… Variety of handsets… …operating systems … …and stakeholders Getting the right message to the right person. Ensuring a real Return On Investment •  Uncertain ROI for many campaigns. •  No clearly defined metrics. ! A Complex Environment Source : Gemalto
  • 28. 2 Joint venture between the UK’s three largest mobile network operators 68.5 million mobile subscribers IGLOO 'These guys [Weve] have more data than anyone could ever imagine, (and) there's now going to be segmentation by location at scale,' says James Connelly, managing director of mobile marketing agency Fetch. 'No one has really cracked location very well for that reason - the scale has always been difficult. This will be the first time you can really do it.‘ Marketing Magazine - Feb 2013 WEVE Case Study – We Locate
  • 29. 30 Digital Card – Your Green Loyalty Solution
  • 30. Mobile  Loyalty   Digital  card   issuing  and   management   One-­‐to-­‐one   messaging   Partner  and   coali5on   programs   A n a l y t i c s   Mobile  Offers   Issuing  &   Distribu5on   Acceptance  &   Redemp5on   Clearing  &   Repor5ng   Mobile  Payments   Branded   Closed   Loop  Card   Integrated   Online     Account   NFC  Card   Provisioning   31   A Unified & Integrated Experience
  • 31. 32 ü  Create secure loyalty cards (pin code required) ü  Identify a customer, with barcode (13 types supported) or QR code ü  Define your company’s contact details (website, e-mail, phone number, store locator etc.); these become available with the digital card information ü  Manage all card data including regular balance and status updates ü  Viral distribution (invite a friend) directly from contacts on the mobile ü  Promote your program on social networks (Facebook and Twitter) providing rewards to customers for posting feedback ü  Communicate: broadcast or personalise information, text and image based ü  Add augmented reality to separate your brand from the rest ü  Incorporate your Social Responsibility ü  Mobile Device Management vs Lost card ü  NFC payments as part of the platform Loyalty Platform Configuration
  • 32. Proximity Marketing using mobile for real- world interaction
  • 33. 34 | Touchatag |August 2009 Use phone camera to scan image and see discounts
  • 34. Viral Distribution Content Platform 01. Create a viral content repository 02. Launch the Viral Effect opinion leaders"
  • 35. ü  Rewards related to specific forward events: ü  Aspirational instant win with “off line” prizes ü  Certain rewarding / Digital gadgets ü  “Viral” Contest: “most wanted content” ü  Prize-draws for the most-active users (Top FWD users) ü  Prize giving for “shortlisted content” authors (UGC) ISTANT WIN: forward it to 3 friends and find out if you have won an official World Cup football CERTAIN REWARD: Forward the ring-tone to 5 friends and you’ll receive an exclusive full track version UGC CONTENTS: upload and forward new viral contents. Enter in the top10 and you win ! FWD USERS: the more you forward, the more chances you have of winning the new prize car Key Motive = Reward
  • 36. They don’t leave because there’s a compelling reason to leave. They leave because there’s no compelling reason to stay Why customers leave?
  • 37. ü  By simplifying traditional practices by applying the best of today’s technologies ü  And pioneering the design and implementation of the next generation of technology & Marketing concepts ü  DSG has set a new level of expectations for innovative consumer brands. DSG Powers Return on Marketing Innovation
  • 38. ü  Mobile is entering an area where it can deliver experiences and branding – an emotional medium at last ü  Mobile is the most relevant , cost effective channel with the highest reach and most richness in Africa ü  It isn’t about mobile as a ‘channel’ but about the customer journey/experience and the roles mobile best plays in making that as easy, useful, relevant and enjoyable as possible Some parting thoughts….
  • 39. Yaron Assabi yaron@dsg.co.za www.dsg.co.za yaronassabi www.youtube.com/dsg247 www.facebook.com/dsglimited