The Prepaid Marketing Battle – Above the Line, Below the Line, or Through the Line?
The news is out. Cost-conscious consumers are shifting towards prepaid (sometimes also called “contract-less”) plans to replace their contract-bound postpaid plans and be able to control spending while cutting costs.
While the prepaid shift is a global trend, it seems particularly strong in the US. Early financial results of US carriers indicate an unprecedented drop in postpaid vs. prepaid numbers. In the fourth quarter of 2009, 65% of the 4.2 million net new U.S. cellphone subscribers were prepaid customers (IDC Technology Research). Couple this trend with the commoditization of smartphones and the question clearly arises – how should US mobile carriers react to these trends and should they re-adjust their marketing strategies to retain the notoriously agnostic prepaid customers?
| Leave a Comment December 29th, 2010
Prepaid Loyalty: Fact or Fiction
The prepaid Loyalty Challenge
Prepaid business presents a challenge when discussing the loyalty factor. How do you create and nurture a long-term relationship with a customer when you don’t even have their name or address? Prepaid customers enjoy the simplicity and freedom of no commitments or contracts. Joining a service provider is as simple as buying a SIM card from the local grocery store. In addition, prepaid subscribers in many high growth markets are low-spend customers, which limit the marketing resources service providers are willing to invest in retention. The result: constant prepaid customer churn. Indonesia, for example has one of the highest churn rates at over 10% a month, while the Philippines has almost 5% monthly churn on average. How then are service providers supposed to create and encourage loyalty from a prepaid customer base that is able to churn at will?
| Leave a Comment December 29th, 2010
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
Pontis recognised as “Cool Vendor” for Context-Aware Computing 2010
Gartner has recognised Pontis as a “Cool Vendor” in their 2010 report, highlighting that, “…context will be a technology that redefines customer experiences and relationships, and, as these Cool Vendors demonstrate, it can deliver value in 2010.”
The report is based on evaluation of vendors that are innovative, impactful and intriguing. The Marketing Delivery Platform™ allows mobile, TV and fixed line operators to target customers with contextual marketing offers.
Real-time contextual marketing andselling, based on a customer’s lifecycle and real-time events, enables operators to push price and product offers at the right time, increasing the response rate by as much as 10%. In today’s fierce competitive markets where power is shifting to the customer, Pontis’ solution helps operators to develop personal relationships with their customers.
Furthermore, the Pontis’ solution allows operators to run hundreds of highly targeted promotional offers simultaneously on a monthly basis, which can be implemented within days, rather than weeks.
Gartner, Inc. Publication ID Number: G00175299
Gartner research is available at www.gartner.com
| 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 October 21st, 2007
Automating the operator’s marketing offer management process
We just featured an interview with the Senior Marketing Director of Pontis, called Automatic For The People. Here is the full article:
The Pontis Integrated Marketing System is a comprehensive system for the definition, execution and analysis of targeted marketing offers, and it is gaining some traction with mobile operators around the world. David Murphy caught up with Pontis Senior Marketing Director Guy Talmi to find out more
Read more
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