Role of Analytics in Customer Management
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The document discusses the evolving landscape of the telecom industry, highlighting shifts from acquisition-driven growth to the necessity of customer retention amidst fierce competition and declining revenue per user. It emphasizes the importance of analytics and micro-segmentation in understanding customer behavior to optimize offerings and strategies for enhancing lifetime value. Additionally, the document stresses the need for effective communication and an integrated approach to data-driven decision making to improve customer engagement and operational efficiency.
Role of Analytics in Customer Management
- 1. Customer management and role of Analytics Mayank Sahai Additional Vice President – Tata Teleservices Ltd The only time a Tata phone won’t be accessible. Please switch off your mobile phones during presentations.
- 2. Agenda Telecom scenario till recently Changing dynamics Role of Analytics in customer lifecycle management
- 3. Telecom scenario till recently – with huge addressable market, the growth was primarily acquisition driven Till now with huge untapped market, growth mostly happened due to incremental reach & filling the gaps in product offerings From around 10% in 2005 to almost 50% tele- density in 2010 Operators expanding their network reach in the small towns & villages More than 95% subscribers coming from prepaid segment With monthly net-adds of 2-3 millions by Source: TRAI annual report 2009-10 major operators, acquisition was the key focus up-till recently As the subscriber base increased and cost to serve started to decline, the innovation for acquisition happened primarily on tariff & price points
- 4. Changing dynamics – New opportunities & challenges With more than 750 MN subscribers, the market is rapidly maturing. Retaining customer is becoming more and more challenging With around 13 operators, the competition is fierce. Declining ARPU trend in an already low ARPU market is forcing telco to optimize cost to serve – no scope for missing the shot Fresh acquisitions at lower ARPUs leading telcos to focus on revenue enhancement from existing customers Continuously evolving user behavior pose a challenge to address customer requirement adequately. With coarse segmentation, telcos finding tough to target customers with broad based strategies across segments Micro-segmentation will form the basis of retention & revenue enhancement strategies in the near future
- 5. Segmentation – key for maximizing lifetime value of customer N=1, R=G :– C K Prahalad From statistical segmentation to value based segmentation Influencers, followers, thought leader, calling behavior, broadcaster , online social animal– new age segmentation is overwhelming Micro-segmentation clubbed with deep analytics will form the basis of product evolution Example Users who want this Segmentation The Product product Telecom segment : Up-market handset Product: Kala-Ghoda art Possible users group profile: Primarily user, high freq. of changing the handset, festival premium plan – SEC-A, resident of south Mumbai, high ARPU, high data usage, high freq of contents (artists frequent visitor to art events, active on visiting art related websites in past 3 months, wallpaper, screen savers, social networking (online & offline), latched to BTSs located in south Mumbai sms alerts on event tech savvy, an influencer region in night time (2100 to 0500 hrs) schedules and artist info)
- 6. Predictive analysis – prevention is better than cure Starting with the business objective, Not data… Business objective Predictive analysis & Segmentation and target impact assessment group identification A effective mix of Predictive analytics and Business input to be the key differentiating factor for the telecom industry going forward
- 7. Product development – a multidimensional maze of variables Product levers Churn management Up-Sell Cross-Sell Multidimensional product development Product evolution Acquisition Market reaction Product bonding SMS IVR GPRS USSD Data (Internet) Customer bonding E-mail SMS IVR An integrated product development process to enable right Internet USSD product mix for every subscriber – Analytics will decode the maze
- 8. Communication – Need for accurate & effective communication to all users ATL SMS Right product Retail Integrated Right Products USSD Communication communication And IBD policy OBD Web Right customer Services E-mail Cust. Policy Attributes Right time care Regulations BTL Internal comm. policy User tolerance Access medium Communication Effectiveness channels Product bonding Customer preference Huge expertise involved in chasing the right communication logic
- 9. Post intervention analysis Evaluation of products, marketing & advertising efforts to be integral method for reverse engineering strategies.. Subscriber base Insights from control group to play a major role in the ‘fact Target based reverse engineering’ Segment process ‘Champion & Challenger’ concepts to take prominence in Control group product evolution Analytics to play key role in assessment of effectiveness of intervention and course correction process.
- 10. Analytics to become pivotal – from information to actionable intelligence Fact based decision making will form the basis for creating differentiation. Targeted product offerings for a small group of Life-time value analysis users Enhance Up-Sell / Cross-sell Analysis Retention strategies specially carved for customers with high propensity to churn Customer Retain Clarify Engagement Offerings designed to bridge the gap between current offerings and customer need Churn / Loyalty Analysis Market segmentation Customer service Analysis Customer profiling Acquire Near real time reaction resulting in instant gratification Marketing mix analysis Behavioral Analysis Providing greater value to customer through better profiling Analytics to play an important role in the entire life cycle of the customer.
- 11. Institutionalization of analytics based decision making Key advantages of institutionalized analytics: Information will become easier to understand and act upon Reduced time to value Transformations that are both significant and enduring Clear focus on highest value opportunities Factual insights to drive actions and deliver value
- 12. Integrated view of customer – organization wide homogeneous understanding of customer Informational synergies between internal functions (i. e. Product, Sales, marketing, customer care, U&R etc) will bring alignment toward key strategic and business objective
- 13. THANK YOU