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 April 5th, 2011
Stopping Postpaid Bleeding with Contextual Marketing
Growth in the postpaid subscriber segment is slowing precipitously across the industry. Stifel Nicolaus analysts estimate that prepaid subscribers grew by 14.7 percent year-over-year while postpaid subscribers grew by only 2.9 percent year-over-year (Wirelessweek.com 21 May 2010). Considering the significantly higher revenue generated by postpaid customers (vs. prepaid), this is not exactly exciting news. So, is losing postpaid customers an unstoppable trend, or is there a way to alleviate the pain?
| 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 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 July 1st, 2009
The race to win the hearts and minds of pre-paid customers
In these cash conscious times, with the race between mobile operators to retain customers and drive-up levels of usage, mobile operators need to focus their efforts on more effectively marketing to, and impacting the behaviour of, their pre-paid customers.
With around 1 billion prepaid subscribers worldwide, impacting this group of subscribers’ top-up frequency and amounts, as well as their consumption habits, represents a hugely lucrative, yet under-utilised opportunity to drive ARPU and reduce churn. If carried out in a targeted and timely manner, addressing pre paid customers has proven to increase overall revenues, (versus control group) by as much as 6-8%. Operators should therefore focus on enticing customers to top-up when their balance is low and reviving ‘silent’ customers with contextual offers.
| Leave a Comment September 8th, 2008
Building A Synchronized Set of Prepaid Offers
This is the third and final post in a series of three where we revealed how we went about impacting prepaid behavior in our work with one of the largest prepaid operators in the world.
The following are the main behavior indicators we take into account when building a synchronized set of offers to different segments. To see how we impacted each please see the before and after graphs in How Do We Impact Prepaid Behavior?
> The time period that goes by between top ups – the shorter the period is means the subscriber is more active.
> The time that goes by from reaching a zero balance until the next top up is even more important, because each day that goes by without talking, means the subscriber could be churning. This resonating silence is referred to as a ‘dormant subscriber’.
> The third factor is the date of the last call, or days from the last call. This is extremely important because since there is no contract, there is no proactive activity involved in case the subscriber wants to churn like calling the operator to terminate service. That is the main reason why so many prepaid subscribers become dormant, and why this phenomenon is often referred to as ‘passive churn’.
| Leave a Comment August 11th, 2008
How Do We Impact Prepaid Behavior?
In our first post on impacting prepaid behavior we demonstrated how we increased usage within a “mid–ARPU” prepaid segment, using a multi-stage marketing program. What is the strategic impact we achieved? First let us take a look at the before and after status of each phenomenon and then we will explain how we did it.
As we can see in the below graph showing last call date distribution (Phenomenon 1) a subscriber that didn’t talk for 30 days is considered dormant. As a result of our targeted marketing program we managed to reduce the time frame from the last call made (a shift from the right to the left on the graph), where subscribers actually remained active over time. This is based on a three month period that began in January 2008, and three months later we checked how many were still active. So for example, subscribers from day 30 to day 60 in the graph made their last call in March, and subscribers from 61 to 90 made their last call in February. What we managed to do is bring about a shift where more subscribers remained active over time or to put it another way – kept talking!
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