Mobile network operators often ask 'how can we leverage the social networking phenomena'? A better question, says Jouko Ahvenainen, is 'how can we mine the social network we already have - that is, the network of our subscribers'?
Mobile phones generate better and more useful information about consumers than any other technology, including the web. How people use their phone is a very personal thing. Who people call, text and save in their phones is more closely related to their 'real' network of contacts than the people they connect with on Facebook, Twitter or MySpace. In the book I helped write, Social Media Marketing, one passage reads:
"The mobile device is a key element of the digital footprint since it is oriented towards capturing information (which is a driver of the digital footprint). The real question for the telecoms and mobile industry is what can they do with all this information? More importantly, what could they do in future with all this information?"
By accepting this advantage and looking at how this data can be utilised, while also maintaining strict standards of trust and privacy with subscribers, mobile phone operators can understand the best asset they already have - the 'goldmine' of subscriber data.
This data can open exciting new revenue channels and give deep customer insight so operators can offer better products and services. They can also create much more effective anti-churn campaigns. In addition to behaviour and demographic information, subscriber social network and influence information can be uncovered. Who a subscriber has influence over is a critical point when it comes to churn. If person A churns, and brings person B, C and D with them, the problem has been quadrupled. By identifying that person A might churn, and that he or she will bring three other leavers along, mobile operators can make churn busting campaigns far more economical, with far greater impact. Operators can also be a source of market research data in the future, when they can collect more data than traditional market research firms can.
Of course, maintaining subscriber privacy is critical in all this, and it is certainly achievable. But it requires a shift in culture. There is a stark difference between trying to 'know' your customer and trying to 'own' your customer. Web companies continue to 'know' their customers better, while many phone operators stick to an outdated notion that they 'own' their customers. The longer the telecoms industry delays knowing the customer better, the longer the industry will lose out. Embracing the power of social networking information is key to this transformation.
Many operators hope that call data records (CDRs) give enough information to gain improved customer insight. It is a good starting point to make the operator's own marketing activities more effective, but it is not enough to be a platform for advertising and social services in mobile. We need to know more about how the subscriber interacts and uses service elements. There are three things (generally accepted) that social media requires to know a customer better:
1. You must incentivise a customer to share more personal information about him/herself. This assumes that all privacy / confidentiality standards are adhered to.
2. An open ecosystem / platform is needed. At present, Facebook and Google Android are the best examples of where third parties interact on open playing fields, and as such, do the work to grow the ecosystem. The best part about this is it can be exploited without direct monetary rewards.
3. We need touch points. Places where the operator can interact directly with the customer and generate a two-way communication. Broadcasting information at customers without interaction (one-way street) is an outdated approach and no longer prescient in today's Twitter age. Advertisements are the best option (an alternative, call centres, are too expensive). And social networking can make these advertisements personal, intuitive and relevant - rather than annoying to the subscriber. Open systems are the best location for the advertisement to be placed.
With these being the first steps for operators, a starting point is by thinking about marketing and services in a new way. The marketing can no longer be a one-way broadcast of messages to customers, it must be a much more interactive relationship that also supports word-of-mouth. And it is the same with services: operators cannot make or select all services for the subscribers; users must be able to create their own services and choose which ones they want to use. Web 2.0 truly is coming to mobile, and it offers a platform where people can do what they want to do. It's not a place to push selected ideas and models to them. And web 2.0 is not the only evolution, but also CRM 2.0, which is where subscribers can also utilise their own data and data analytics for their own benefit. For example, subscribers can know their own social network and manage their own connections. It becomes a way to motivate people to share their data when they can get benefits from doing so.
Following this, a measurement system must be created and agreed upon. Operators cannot act until there is a way to manage social media programmes. One approach has been to track user behaviour at the network level. An example of this is the mechanism Phorm's service is based upon. Phorm has become a pressing issue in the UK because, even if you did get permission to undertake this level of tracking, people do not understand networks and don't trust what they don't understand. People are normally okay to share small amounts of information if they get something back, but they don't like one-way spying models.
By working at higher levels of the stack than networking level (usually, the application level) and by making 'knowing the customer better' the goal rather than 'owning the customer,' there are huge marketing gains to be had as well as a new level of trust to be engendered with subscribers. The only way this can be achieved is through aggregated data, by not working with specific individuals or specific transactions but rather with aggregates and data patterns derived from the data.
Data aggregates for marketing purposes also presents a solid business case for the converged operator. If an operator owns customer touchpoints via not only the mobile phone, but also broadband, TV, landline, etc, the data presents a richer picture of the customer and it becomes easier to engender trust when the customer only has to share information once, with one brand whom they trust.
As mentioned before, by understanding people's behaviours in the context of this network, operators can pull out and define a member's measure of influence, and use this for new clever mobile and online marketing techniques. In the case of London-based Flirtomatic, the web and mobile social network for flirting for ages 18+, they are using this superior customer insight to engage in more targeted marketing and services for its influential members - those who have word of mouth impact on other members. Flirtomatic applies 'social intelligence' to create more compelling services for each customer segment, and targeted, relevant and personal marketing and promotions, via web and mobile. Flirtomatic is focused on generating viral take-up throughout its community via word-of-mouth marketing. This approach works two-fold, because influential members have both direct pull over purchasing decisions (by recommending products to their friends) as well as indirect pull (by friends' desire to imitate or mimic their friends' purchases). Flirtomatic is using Xtract Social Links product for this insight.
This works because studies show that social influence is more important than any other factor in consumers' purchasing decisions. One research on car-buying showed that 71 per cent of car buyers are influenced by what their friends said, whereas only 17 per cent were influenced by TV ads.
This insight can be applied by the operator for its own marketing, such as churn campaigns, where as much as a 20 per cent improvement in campaign effectivity has been reached, or for generating new revenue through third-party advertising schemes. And this market is growing fast; eMarketer predicted that spending on behavioural targeting will reach $3.8 billion by 2011.
Flirtomatic's CEO Mark Curtis recently said: "The early results from customer segmentation are very insightful and exciting. We can now see considerable potential, as the business scales, to directly improve our revenues through a sophisticated view of our customers, their behaviour and the pattern of their relationships. The tool hands us an effective, powerful CRM solution."
Jouko Ahvenainen, co-founder and VP at Xtract and author of Social Media Marketing , and can be contacted via Jouko.Ahvenainen@xtract.com