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CUSTOMER INTELLIGENCE MANAGEMENT - Mining for gold
Who knows more about their customers, a mobile phone operator or Google? The answer, you would think, should be straightforward… but you may be surprised says Adrian Kelly
The significant advantage that mobile phone operators have over other industries, and that includes the Channel 4s, Skys and even Googles of this world, is the vast volume of customer data they accumulate from a consumer’s daily interaction with the most personal of devices, the mobile phone. Clearly the operators are sitting on a customer information goldmine. At the moment however, operators are simply not using this wealth of information and as a result are missing an incredible opportunity.
It is an opportunity upon which they will be looking to capitalise over the next 12-18 months as marketing continues to be a key battleground for service providers looking to avoid becoming a bit-pipe. Under threat from many quarters, including media companies and Internet brands, operators’ marketing initiatives have to become two pronged. Acquisition marketing remains a battle of the brands, where expensive sponsorship and clever pricing are essential to stand out in the increasingly crowded marketplace. Cross and up sell however, as well as retention marketing, is much more of a fine art. Marketing to existing customers requires a ‘mass-personalisation’ approach, based on deep customer knowledge.
Operator’s retention tactics (offering an incentive to stay the moment a subscriber requests their PAC number) are well known among subscribers. However, the aim must be to offer the appropriate and relevant incentive in anticipation of a customer’s natural churn cycle, or to encourage them to adopt new services when the time is right for that individual customer – not waiting until it is more costly or potentially too late to keep them. Today, marketing departments are often restricted by a lack of up-to-date information about current subscriber behaviour, as their hands are tied by a dependence on technical teams to extract the information they need to target campaigns, and to assess their success rate. The upshot of which is that marketing teams are left unable to react quickly and accurately to opportunities and events.
Numerous service providers are finding that established techniques of segmentation based on demographics do not create the depth and accuracy of knowledge required. The latest generation of Customer Intelligence Management solutions offer a whole new level of depth, accuracy and speed of knowledge acquisition for service provider marketing departments, allowing them to truly capitalise on the customer data currently sitting unused within the operator’s network. Segmentation is performed on service usage data, and so represents their actual behaviour, rather than assumed behaviour from demographics, and is updated daily direct to the desktop. Customer Intelligence Management is already proving to be a compelling prospect for operators hoping that it will give them a unique advantage over their Internet-based challengers.
Cross and up selling focused marketing should, by its nature, be easier than acquisition marketing. You are talking to a captive audience. One that you know, has already bought into the brand proposition, and is probably reasonably happy with the service. To use a business analogy it’s a little like walking into a sales meeting where you already know the people you are going to see. Compare it to the acquisition scenario, which is much more akin to the cold call, and you should be in for an easier ride. However, if your preparatory information is out of date, or you don’t research the motivations and preferences of the people you are meeting, you will not be able to take advantage of the situation. In fact, if your research is so poor that you are making offers that are completely irrelevant, you may even damage your existing relationship.
Service providers can now have access to incredibly detailed behavioural information. With data services continuously on the rise, operators now know when someone sends an MMS, what type of multimedia it was, who it went to, what application-to-person services are used (horoscopes, TV show information), and what TV shows they interact with through voting and content applications. As the mobile Internet is becoming an increasingly real phenomenon, service providers also have access to much more web browsing information than a search engine can record – wherever the consumer goes online using their mobile or PDA, the operator has a click by click record of their behaviour.
Effective Customer Intelligence Management logs and analyses service usage patterns and mobile browsing habits as they occur – presenting them to marketers in an easily actionable format. Such a revolutionary approach will put operators in the unique position of not only understanding the habits, behaviour and interests of the user, but also their wider social circle - and crucially, being able to act on them.
Operators have tended to segment their customer base down to around ten profiles (such as heavy talkers, texters, business data users). Limiting to so few, mainly demographic based groups of subscribers tends to overlook less mainstream usage trends and character traits of users, and becomes increasingly restrictive as operators look to offer more niche services and move into the content and media markets. With effective real time analysis, a ten-segment model will become a thing of the past, as media industry modelling with up to 100 segments (as used by the BBC for example) becomes a real possibility, and not a management nightmare. More precise segmentation is the passport to a ‘mass personalisation’ approach, with individuals’ brand loyalty strengthening when marketing is more personally relevant. From a product planning perspective there is also further opportunity for service providers to tailor new services to suit ever-evolving communities.
The next twelve to eighteen months will present two major challenges for service providers; increasing market competition and continued hesitancy among consumers to adopt new and unproven services. The key to success on both fronts will be a service provider’s ability to understand its customers; their motivations and preferences. Only by knowing their audience will they be able to offer effectively personalised services and, in doing so, stay one step ahead of the market.
Adrian Kelly is head of Customer Intelligence Management for Acision
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