NBS showcase (2005-2010)

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General presentation on needs-based segmentation for mobile service providers.

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  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • R M - Corporate NBS July 200 6 Tudásbánya Kft. - www.tudasbanya.hu
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • Tudásbánya Kft. - www.tudasbanya.hu R M - Corporate NBS July 200 6
  • NBS showcase (2005-2010)

    1. 1. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Corporate Needs-based Segmentation (CNBS) Tudásbánya Kft. July, 20061
    2. 2. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Corporate Needs Based Segmentation (CNBS) was considered as a competitive advantage by our customers. We delivery CNBS to 4 different countries in EU to Mobile Service Providers in 2005-20102
    3. 3. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu The telecommunication industry is generally changing – Strategic level Convergent Telco Highly Financial Differentiated Services Mobile Insurance From voice service to the Mobile 3G field of IPTV (broadcasting) and FMCG/Retail Pharmacies mobile payment. Customer Value Book stores Gas Stations Uniform Uniform Highly Differentiated Customer Needs The telecommunication industry was generally changing, fulfilling more diverse needs, that3 generates highly differing profits
    4. 4. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu The telecommunication industry is generally changing – On the operational level In 1999 In 2006 ~5 handsets ~30 handsets ~10 tariff plans ~25 tariff plans ~10 value added ~200 value added products products ~ 3 tariff options ~ 20 tariff options 4-5 minutes to 4-5 minutes to serve serve Needs based segmentation is to establish customer groups that has the same (similar) 4P4 characteristics
    5. 5. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu How churn prediction and customer value calculation segmentation scheme can be improved? Top Value Churn probability Medium Value Low Medium High Low Value Existing segmentations raise additional questions and challenges: •Why the top value segment become •We know who are the customers with profitable? high churn probability, but how can we •How can we increase profit on the low keep them? value customers? •How to reach customers with Medium churn probability? Existing (usual) segmentations can be improved easily with NBS information5
    6. 6. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu What is needs based segmentation Fezorg Ltd.: The ultimate goal is: Next action: • Product - 3 new 3G handsets for 2 years contract To determine for each customer, the classic • Place - Propose over call center, confirm it after 4 4P-s of the next possible step of the provider days, try it no more then 2 times • Promotions towards that particular customer. - Provide detailed description • Price - List price, then -Apply loyalty discount -Apply volume discount Fezorg Ltd.: The practice: Generally: - High value customer – High purchasing Assign customers into groups with approximately the power same characteristics (4P). Then treat each customer - No negotiating power (discounting) according to the group generally, but apply rules for - Internet user, innovative for new products - Prefers CC, do not prefer shops individual customers - Price sensitivity is medium Needs based segmentation is to establish customer groups that has the same (or similar) 4P6 characteristics
    7. 7. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Usage of NBS…strategic samples  Strategic segmentation for customer management  Segment planning  Segment performance management  Campaigning (inbound and outbound)  Basic targeting enabler  Up-sell/Cross-sell  Product development  Needs to fulfill  Customer service  Different segments can be served differently (reducing service time, increasing satisfaction)  Channel routing/optimization  Commission / Incentive management7
    8. 8. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Some samples….  Large mobile operator tailors the loyalty program according to the need of churners.  Bank call center tries to short customer calls according to needs based segments  Mobile operator promotes new products according to the „explorers” media consumption8
    9. 9. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Questions to answer  Contract period (12-36 months)  Ratio to invest into better (more expensive) handsets (subsidy optimization)  Tariff structure (mass, customized, specialized)  Discounting  Next best offer  …  …9
    10. 10. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Segment Card - „Son and Father” 1. Segment description 1. Handset description # of companies avg age of handset share to total corporate avg # feature os handsets # sim-cards 2. Avg # of monthly fee product used 2. Average company size: 1-5 employee, 2-5 MMS penetration temporary 3G penetration Typical location: small, medium cities etc. Average company income: XXXXX 3. Contractual descriptions 3. Average bill size: XXXXXX avg discount rate Average CV: XXXX share of customized contracts CV-within group: X1% share of specialized contracts CV-within RM: X2% avg # of committed days CV-International: X3% 4. Service KPI-s CV-Fix X4% 5. Trend KPI-s CV-VAS: X5% Increase in MMS penetration Quarter over 4. Traffic description Quarter avg number of sms avg number of mms avg number of minutes per direction Different Needs-based customer groups can be proposed and served differently, products and services can be priced differently.10
    11. 11. info@tudasbanya.huTudásbánya Kft www.tudasbanya.hu „Rainbow Mobile (RM)” Tudásbánya Kft Corporate NBS Concept
    12. 12. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Establish RM Needs-Based segmentation framework The RM Framework for CNBS will be established on workshops and on Tudásbánya best12 practices. Tudásbánya proposes 5 aspects (see above) for NBS.
    13. 13. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Data acquisition 1. Availability check of measures, variables (according to the NBS framework) 2. Designing NBS data store (data mart) for RM data warehouse measures and variables (dimensional design) 3. Develop SQL/PLSQL scripts to read data from RM data warehouse and write it to NBS data store (Existing ETT tools can be utilized) 4. Fine tuning of data model and scripts Tudásbánya will develop SQL and PL/SQL scripts to access RM data warehouse for the13 input variables to the needs-based segmentation
    14. 14. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Analysis and statistical description 1. Measures will be transformed into unified dimensions 2. Dimensions will be statistically described and documented (standard) 3. Segmentation target variables will defined and set 4. Correlation and Factor analysis will be Aspect 1 conducted and documented 5. Aspects will be verified for segmentation power 6. Framework will be reviewed with RM 7. Cluster analysis will be performed (K-Mean, Two-Steps, etc.) to get the first set of micro- segments Aspect 2 Number of statistical methods will be used for clustering14
    15. 15. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu First cut of micro-segments 1. Statistical methods are usually generating large number of micro-segments 2. Micro-segments will be described statistically over standard telco KPIs (ARPU, MOU, # of sms sent, etc.) This will give the primary indication of the profile of each segments 3. Similar micro-segments can be merged 4. Segmentation target variables are used for guidance Statistical NBS Data Store profiling and KPI calculations No Segmentation is satisfactory Yes Non input variables will be used for initial profiling of the micro segments15
    16. 16. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Concept….. Periodically RM Operative repeated Data warehouse Staff Source data segmentation is from RM data warehouse Result of segmentation loaded to the RM data Quarterly calculated Opeartor can check the warehouse segments. NBS value for each customer and can act Verifying segments twice in a on it effectively year with survey.16
    17. 17. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu How can we establish needs-based segments – project concept Definition Data collection Market Recommendati Post survey and ons and production • Data model for input support and variables profiling business utilization maintenance 2. Benchmarks and • Data acquisition 2. Survey design and best practices development • SQ/PLSQL script 2. Benchmarks 3. RM Needs-based development 3. Survey execution • Quick wins and best segmentation practices framework 4. Survey evaluation • Medium (within Analysis and 3. RM Needs- 1 year) term statistical 5. Segment profiling based actions description segmentation framework 2. Statistical Analysis of • Long term dimensions (over a year) actions 3. Defining target variables 4. Statistical segmentation Tudásbánya is proposing a 17 weeks project to establish needs-based segmentation with17 account planning at RM Slovakia
    18. 18. info@tudasbanya.huTudásbánya Kft www.tudasbanya.hu Tudásbánya Kft How does this work?
    19. 19. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Segment Card - „Son and Father” 1. Segment description 1. Handset description # of companies avg age of handset share to total corporate avg # feature os handsets # sim-cards 2. Avg # of monthly fee product used 2. Average company size: 1-5 employee, 2-5 MMS penetration temporary 3G penetration Typical location: small, medium cities etc. Average company income: XXXXX 3. Contractual descriptions 3. Average bill size: XXXXXX avg discount rate Average CV: XXXX share of customized contracts CV-within group: X1% share of specialized contracts CV-within RM: X2% avg # of committed days CV-International: X3% 4. Service KPI-s CV-Fix X4% 5. Trend KPI-s CV-VAS: X5% Increase in MMS penetration Quarter over 4. Traffic description Quarter avg number of sms avg number of mms avg number of minutes per direction Different Needs-based customer groups can be proposed and served differently, products and services can be priced differently.19
    20. 20. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Segment „X” - Trend S e g m e n t d e v e lo p m e n t A ve ra g e C V ( F t) A R P U ( F t) C hurn R a te ( %) 17683 10,6 9592 9,8 7796 7980 16908 7,22 15725 2004Q1 2005Q1 2005 Q4 2004Q1 2005Q1 2005Q4 2004Q1 2005Q1 2005Q4 D a ta A R P U / A R P U ( %) A v g . N u m b e r o f S IM / M o n t h ly f e e / A R P U ( % ) C us to me r 1,1 5,1 27,2 26,9 0,82 0,89 4,2 3,6 18,6 2004Q1 2005Q1 2005Q4 2004Q1 2005Q1 2005Q4 2004Q1 2005Q1 2005Q420
    21. 21. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Value creation - „Son and Father” Segment size Average company size Customer Value increase YoY 11% 3.1 11% 100% 90% Within network Other network 2 656 80% 70% 2 884 230 60% 21 min 618 741 50% 51 min. 801 40% 2 554 Voice 165 min. 30% 20% 3 759 Top_1 Top_2 Top_3 Top_4 10% 473 0% 571 1 Group Corp Part TMO Other Mob. Fix Intern. Messaging Other VAS Monthly Fee Interc onnect21
    22. 22. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Focus by segments Segment / Focus „A” „B” „C” „D” „E” „F” „G” Acquisition Up sell (SIM) Cross sell (services) Retention Increase revenue Cost reduction22
    23. 23. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Segment Planning – Segment „X” Segment Current period Plan Period Brief actions Focus Increase data usage Data Usage: Data Usage: 1787 kbyte 1900 kbyte Retention X% Churn Y% Churn 1. Propose 32 months contract instead of 24 for customer with completed contracts 2. Offer 32 months contract after 12 months in current contract Action Detailed Direct Effect on Other effect description Segment Propose 32 months Monthly campaigns Avg. contract days will contract instead of 24 increase to 300 days …23
    24. 24. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Execution on single account level Account Representati Corporate Avg. Bill # of active Name Tax Id Avg. CV ve NBS Size SIM Suburban Peter XXXXX Blue chips 131000 26200 31 Bank Oravecz It e m V a lu e Region Central Size Category Large enterprise First 4 SIM cards has significant outgoing international traffic to USA. Descriptor For 20 monthly fee international package should be recommended, that covers calling 20% discounted First Offer international for 1 selected country. Second Monthly fee includes 20 SMS, that are used only 40% of the SIM cards Descriptor Monthly fee can be reduced by 30 - 0 SMS included for 24 months, for the SIM cards using SMS an sms- Second Offer package should be recommended.24
    25. 25. info@tudasbanya.huTudásbánya Kft www.tudasbanya.hu Tudásbánya Kft Appendix
    26. 26. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Result – Sample segment profile Generic conditions Channel MOU < 10000 Dedicate partner Number of contacted phone numbers < 1000 Offer Profile based on internal data (ARPU: 30257, CV:27812, Churn-red:18%) International package* Highest MOU 2912 in +1015 out Favorite country* International MOU: 157 min Corporate Relax** Innovation score 8.48 (twice of the average) „BestVoice” tariff plan (42%) Profile based on survey data •Good economic situation Service •Strong hope for growth 4000 10 Pricing 2086 2000 5 2,94 0 0 Méret db Méret %26
    27. 27. info@tudasbanya.hu Tudásbánya Kft www.tudasbanya.hu Thank you for your attention Questions, Comments csaba.kiss@tudasbanya.hu27

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