Analytics, KPIs for effective Churn & Loyalty management

Using Analytics, KPIs and process management to
achieve superior customer contact management,
churn reduction and loyalty

Ehtisham Rao

TMF Management World Middle East 2011

Pakistan Mobile Communications (Pvt.) Limited 1

Broad agenda

A look at Loyalty and Churn in Telcos

Aligning and modeling the customer contact strategy

Case based review of cascaded KPIs and metrics


Churn in Telcos is a function of size and prepaid proportion

Monthly Churn %, Penetration and Prepaid % in different countries Q1 2009
Monthly churn %

7.00%
High Churn:

6.00% Most of these countries are
in emerging market Pakistan

Have high prepaid focus Philippines South Africa
5.00% Low Churn:
Indonesia* Mostly high
4.00% Morocco penetration developed
China Denmark
market
Most have them have
Nigeria Peru
3.00% Argentina smaller prepaid
Brazil segment
Egypt
2.00% New – Austria
India
Belgium Zeland
Algeria Finland

1.00%
Japan Sweden Singapore
Switzerland
0.00%
0% 20% 40% 60% 80% 100% 120% 140% 160%
Market Penetration %

Bubble size indicates prepaid subs % Courtesy Capgemini Consulting


As markets mature, costs shift and so should the focus

Churn on the rise:
SAC lowers to give way to
more operational space in
SRC


Drivers; lack of discounts, recognition of loyalty

Top reasons behind voluntary Churn in Telecom What would have prevented Churn

Not enough choices 14% Provide greater
choice
19%

No continuity in fault
resolution
22% Keep informed about
service problem
29%

In dark about service
problem
23%
Continuity in handling
complaints 31%
CC staff unaware of
25%
service history
Reward for renewing
contract
50%
New discount not
applied
27%
New discounts
applied 57%
No reward for
39%
contract renewal

Though operators can take reactive measures such as better conflict management capability among their
CC staffs to manage churning customer , proactively discount, renewal reward etc seem to be more
effective in churn management
Courtesy Capgemini Consulting


Loyalty & Churn are flip side of the coin

Reduce Churn
Business
Objectives
Increase ARPU
Loyalty Objectives

Focus on High Value
Customers Customer Loyalty has a wide
definition that can serve a
number of objectives including
Business
reduce churn, and increase
Transformation Customer Profiling
loyalty, as a rather direct
Objectives consequence of different
programs and campaigns
Improve Customer
Experience Delivery

Enable broad
communication with
Customer Customers
Relationship
Objectives Contribute to Brand
Perception


Loyalty & Churn in continuum
Categories Programs High-level Actions Description

1 • Bonuses (based on different
usages)
• Find a friend
• Direct point systems (operators
Bonus point services)
systems • Multi-partner point systems
• Indirect point systems (3rd •
Visible programs party services)
Customer gets
information about
and campaigns • Lotteries the scheme
to increase • Incoming calls
• In most cases, the
customer signs-up
loyalty for participating
2
• Friends and family &
Tiers and communities
clubs • Tiers
• Clubs

3
• Basic call related information
“Behind the and customer profiling
• Pro-active offers
from the operators
scene” churn- Offers based • Social network analysis • Customer doesn‟t
prevention on „Analytics‟ • Customer service behavior know she is part of
actions • Speech analysis a “program”


Evolution of customer contact management for campaigns

Customer Success
View Rate
Traditional Campaign
Enterprise-Initiated
Marketing-Driven Intrusive 3%

Targeted Campaign
Segment based 20%
Relevant
Marketing

Timely Interaction

Event driven Appropriate 40%
Relationship based

Gartner Group 2003


10 opportunity areas in Customer Lifecycle Management

Courtesy KXEN


Campaign Management OR Marketing Automation

Managing Campaigns is only part of the Marketing Automation phenomenon

• Open, flexible, business intelligence platform
• Powerful descriptive and predictive analytics Customer & Business
• Pre-built dashboards, personalized access Insight

• Optimize planning & budgeting
• Manage content and approvals
• Share best practice templates

Planning &
Marketing Analytics Resource
• Closed loop tracking Management
• Role-based, real time analytics
• Continuous learning
Manage Understand

• Segmentation and targeting
Customer
Measure Plan • Campaign design and execution
• Outbound, inbound, triggered
Execute
Response & Campaigns
Lead and Dialogue
Management Management

• Multi-channel response capture
• Collaborative lead management
• Integrated ROI analytics Loyalty
Management &
Execution
• Loyalty Program management
• Member profiling and management
• Promotions and rules definition


The components that must all come together


Marketing Automation – The Building Blocks

Marketing Automation building blocks
1 Strategy / Planning
1
must be integrated
Marketing with analytics,
Plan/Strategy budgets, and
customer
engagement data
4 2 2 Customer
Marketing automation
Marketing Customer engagement must be
breaks a linear Marketing
Analytics Engagement linked seamlessly in
relationship and results real time with the
in a continuum of Marketing planning
planning and action tools
3
3 The Budget for each
Budget/ROI campaign must tie in
with overall plans
and multiple wave
execution

4 Customer behavior
must be fed back
Offer & Price Behavior Results into the marketing
planning continuum


From Campaign Management to Marketing Automation

Seamless Customer
Strategic Customer Insight Experience
Source Data Marketing Automation
Campaign Management Channels Segments

Billing,Payments, Teradata Marketing Analytics
Multi-Channel, Single Wave
Recharge Tele
Data Disparate Campaigns
marketing

Real Time Integration
Warehouse
Campaign A
Mining Reporting Profiling
Customer Modeling
Segment Offer Segmenting
Channel Call Retention
information A B C Center

Multi-Channel Campaign
Campaign B
Automation Sales
Marketing
Segment
V
Offer
B
Channel
C
Contact
Info
Campaign Campaign
C Campaign Acquisition
Budget Design Automation
E-mail
Segment Offer Channel
C B C
CDRs / Pre- and
Postpaid Event-Driven Marketing
SMS
Analytics

CRM / Retention Budget Time
Real
Events
Enterprise
Orchestration Automation Missing Seamless channel Growth
Rules
integration (feedback) !

Missing Components!

Responses


Value comes from Analytics indeed!

FROM TO

Isolated Power users Pervasive BI built into business process
After-the-fact data Real-time, forward looking insight

Reporting results Intelligence-driven processes & workflows

BI tools Analytics driving business value


Marketing action is expanding beyond Query and Reporting support
Driving Performance with Information Requires
Transformational use of BI

“What should I do now,
at the moment of contact?”
Increasing Business Value

“What should I do next?”

“How well are we meeting targets?”

“Explore my data”

“Here are your reports”

BI Generation


Marketing Challenges, the integration ‘island’

Micro / Macro
Execution

Product Portfolio
Offer Response
Management

VISIBILITY
Dashboards Fine Tuning
ROI Analysis
Calendars
Budget


Analytics must supplement the overall Customer contact management strategy


Analytics roadmap


Case- Churn suspect engagement and stabilization (loyalty)
Offer & Take up
15 day cycles introduced from July 1. 2010 onwards:
• New triggers in addition to churn propensity introduced
Marketing Gap Inactivity Period • IT-DWH and BAP teams became part of the same process
• CMT tool modified to achieve the 15 day cycle

Results of the 15 day cycle are convincing
• Customer response on campaigns triple folded
• Complexity and frequency of the campaigns allowed us to see through patterns
Engage
• High value customer engagement seems to be significantly more effective
• Using KXEN based campaign for low value customers is inefficient

• Challenge is to convert the engaged customers into stable,
revenue generating base.

The Stabilization platform is already available to us;
Qualify engaged customers
• Customers moved to the platform based on engagement
• Special Of net • Rotational customers could also be moved
offers • Offers made are behavioral, for every 100 Rs recharge, 10 free minutes etc
Stabilize Stabilization Platform • Bundles on • These customers are on the program for one year so no multiple campaigns
usage threshold required to keep them engaged
• Free recharge • In case customers fall out of the stabilization platform, they get detected
after X AMT again through KXEN otherwise they are moved out of the churn radar
recharges

Push to Customer The platform allows for customers to be contacted automatically once thresholds
are achieved;

Ease of Use “Dear customer, you have qualified for 10 free offnet minutes with your Rs 100
SMS on maturity E Vouchers recharge, kindly SMS the following code to 1234 to receive your voucher”

This point of customer delivery allows for ramp up of rusty high value customers
and allows us to study their behavior while in stabilization phase.


A complete communication dashboard


Communication Dashboard Overview


Value added through each step of the way

Feedback Loop and Automation

Business Data Analytical
Modelling Deployment
Understanding Understanding . Dataset

Monitoring / KPIs


Cascaded KPIs – the essentials

Company
Mission

Corporate Corporate Corporate
Priority 1 Priority 2 Priority 3

Analytic Analytic
Analytic Analytic
Activity 1.1 Activity 1.2 Activity 2.2 Activity 3.1

KPI1 KPI2 KPI 1 KPI 2 KPI 1


Monitoring KPIs- exploded

R.O.I
$$$

Identification of
Offer
Churners

Accuracy Robustness Contactability Attractiveness

Data Time $$ Offer vs
richness Horizon Invested Profile


Takeaways

 Churn has a strong correlation with location.

 Churn as a function of distribution channel

 Network intelligence cannot be replicated through back office
automation

 Loyalty programs should look beyond a narrow set of business
objectives


Thank you—any questions?

Ehtisham Rao
Director Business Intelligence & Billing, Mobilink
+00923008499114
ehtisham.r@mobilink.net


Analytics, KPIs for effective Churn & Loyalty management

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