Social Effects on Customer Retention at a Mobile Operator
Researchers recognize the role that social interaction has in the adoption of new products or services: word-of-mouth interactions can lessen the risk and uncertainty associated with new products. But what about quitting behavior? If social connections can induce a person to adopt a product or service, can they also lead a person to abandon a product or service? Until recently, it has been difficult to study this question because of the extensive data needed to do so, but in the past few years, researchers have used telecommunications databases to explore social network behavior. In the current research, Irit Nitzan and Barak Libai of Tel Aviv University use a cellular phone company’s database of more than one million customers to examine the influence that customers who leave the company (defectors) have on their first-degree contacts (direct contacts, or “neighbors”) in their social network.
| Leave a Comment September 5th, 2010
The Pain in Spain: Fake SIM Activation
Spain has one of the largest mobile markets in Europe, with effective competition from four mobile network operators and a growing number of resellers. The economic crisis, combined with new EU regulations and the fierce competition has driven down the cost of mobile calls by 35% since 2005. As if that’s not enough, the Spanish prepaid mobile market has encountered another challenge which seriously affected ARPU. Fake SIM activations, also known as “revolving doors”, have recently hit Spain, significantly impacting operators’ revenue. Some users activate a new card due to the loss of an old SIM, but others take advantage of an attractive acquisition offer (e.g. free airtime, subsidized handset…). In such a case, the old SIM remains dormant and in due time is considered a churned customer.How can operators handle such a phenomenon? How can they identify and differentiate between the different kinds of SIM activations, and more importantly – how can they be prevented? Read more
| Leave a Comment July 20th, 2010
Case Study: Enriching Marketing Campaigns With Context Pays Off for a Tier 1 European Mobile Operator
Gartner has published a case study* in which they document how the use of real-time, contextual information, targeted highly relevant offers to individual customers, have helped a Tier 1 European provider boost their service revenue from prepaid phones, enhance customer loyalty and reduce churn.
The main findings illustrate how the operator has succeeded to follow and better understand the individual needs of their entire customer base and based on this data offered specific targeted prices and products which were highly relevant to individual subscribers. Due to the real-time execution and automatic fulfillment of these offers allowing quick follow-up, and guaranteeing higher response rates, the operator had succeeded to increase overall revenue per subscriber: “offerings that are personalized to the customer segment and presented when the customer is most receptive generate tangible new revenue.”
In this example, the case study highlights how the operator’s “acceptance of promotional offers rose from 2% – 10%.” It further explores how the operator has managed to create an ongoing dialogue with their customers.
Furthermore, the case study recommends that “vendors should target the marketing team, rather than the IT or business intelligence (BI) teams with their products. Highlight that this type of approach allows marketers to radically change the way in which they create and manage promotions”
In addition it is recommended that: “Communications service providers (CSPs) should select a vendor with a proven track record of successful implementations and comprehensive consulting services — they will need to rely on the vendor’s advice to avoid the most common mistakes when creating this new type of campaign”.*
Gartner, Inc.:. Publication ID Number: G00175497
Gartner research is available at www.gartner.com
| Leave a Comment July 20th, 2010
Russia the Freedom of Choice: Multi SIM Ownership Drives Churn and Decreases ARPU
Russia has the largest mobile market in Central and Eastern Europe and is continuously growing. At the end of May 2009 the total number of subscribers reached 194.7 millions, with customers being wooed by three major service providers (MTS, VimpelCom and MegaFon). Competition has further intensified with the growing penetration of multiple SIM ownership. As the majority of handsets are not purchased through the operators but rather from independent stores, Russian mobile operators could not lock handsets to their networks, and consequently customers can benefit from different operators’ SIMs on a daily basis. Read more
| Leave a Comment July 20th, 2010
Segmentation vs. Behavioral Life Cycle Management:Getting the most of Your Marketing Efforts
The saturation levels of mobile markets and the low exit barriers for customers have caused many operators to shift the weight of their marketing efforts from new customer acquisition to customer retention. As part of this trend, operators are investing lots of funds on sophisticated customer segmentation solutions. Yet, are these segmentation efforts really delivering the desired results? Are common proactive marketing practices, based on traditional segmentation succeeding to increase customer loyalty and profitability?
| Leave a Comment June 16th, 2010
Protecting your Prepaid Base in a Competitive Market
Wikipedia defines churn as “a possible indicator of customer dissatisfaction, cheaper and/or better offers from the competition, more successful sales and/or marketing by the competition, or reasons having to do with the customer life cycle.” How can you avoid churn and nurture long-term relationships with your prepaid customer base in a competitive market consisting of customers that have no contractual commitment?
In the context of mobile subscribers, “churn prevention” is almost synonymous to “loyalty” and “retention.” While “loyalty” points to the required activities to keep customer faithful, “retention” makes sure customers do not leave, with superior offers and other customer-centric activities, compared to the alternatives provided by the competition. To ensure these two vital factors are fulfilled and have a real impact on your customer base you must establish real-time contextual marketing and selling capabilities.
| Leave a Comment August 3rd, 2008
Impacting Prepaid Behavior To Increase Revenues
The big race to retain customers and maintain their level of usage has proven to be extremely challenging in the prepaid sector. Generic characteristics of this service, lack of users’ data and minimal differentiation bring marketing challenges to new heights.
This post is about the best way to overcome these obstacles and go about impacting subscriber behavior in one of the most lucrative revenue sectors for mobile operators – the prepaid sector that is comprised of over 1 bln subscribers worldwide. The following insight is based on our activity with one of the largest prepaid operators in the world.
Our first challenge with this operator was to increase usage within a “mid–ARPU” prepaid segment. Experience has taught us that the best way to impact behavior in this segment is to integrate real time and immediate response tactics into all marketing activities. Here is a real life sample of how we went about increasing top up recharges and voice usage for subscribers with an average top up amount of lower than €10.
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