Monetizing customer knowledge without upsetting the customer. Version 2 May 2014 Dr. Andy Tiller (VP Product Marketing)

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1 Monetizing customer knowledge without upsetting the customer Version 2 May 2014 Dr. Andy Tiller (VP Product Marketing)

2 Customer Knowledge a new source of value for Operators Mobile Network Operators need to unlock the value of their customer knowledge in order to address the threat/opportunity presented by Over- The- Top (OTT) players and combat declining revenues from traditional services. Operators have the potential to gain much richer knowledge than the OTT players because they have a holistic view of how their subscribers use their mobile devices, not just limited insight of activities via a single app or website. The challenge operators have is in finding the right tools in order to derive insights from their network data and, more importantly, to make effective use of this analysis without alienating their customers. Big Data Analytics lot of rope for Operators to hang themselves? In a recent white paper 1, Analysys Mason provided some revealing insights into Mobile Operators Big Data initiatives. It s clear that while many of these initiatives are in their early stages, Operators are beginning to use Big Data Analytics to extract customer knowledge from their networks and monetize it. Key mechanisms for monetization include mobile advertising and making customer data available to third parties for a fee. The Analysys Mason study demonstrates that Operators know they need to use their customer knowledge very carefully. With headlines causing alarm about governments snooping on citizens network traffic 2, it s perhaps not surprising that nearly 70% of Operators surveyed state the most significant reason they are not currently exploiting Big Data for advertising and marketing purposes is due to concerns about personal data privacy 1. Apart from legal and regulatory requirements to protect personal data, Operators know that customer loyalty can easily be damaged by a bad experience of being marketed to. Opt- in not the whole answer According to Analysys Mason, OTT players are impacted less by personal data privacy restrictions than Network Operators because they have pursued a policy of getting their subscribers to opt- in to use of their personal data for marketing purposes. Opt- in can circumvent legal and regulatory constraints, but Operators still need to be careful. According to the World Economic Forum and Boston Consulting Group, customers need to be 1 Using Big Data to Build Value for Operators (May 2013), by Justin van der Lande, Senior Analyst at Analysys Mason 2 For example, 2013 s PRISM scandal in which Internet companies were accused of helping the US National Security Agency to spy inappropriately on citizens s and web usage. 2

3 engaged in understanding how their personal data is used and how value is created (see Figure 1). Figure 1: Customer engagement is vital to unlocking the value of personal data In other words, giving customers clear incentives to opt- in and feel in control of how their data is used is key. Asking customers to tick a box on a web form is no longer sufficient to keep them happily opted- in. Instead, opt- in must move to a real- time permission- based approach, where the customer is always in control. Veris C³ - the right tool for the job If Operators want to avoid giving their customers a bad marketing experience there are two key requirements: the first is to only deliver relevant ads and offers. The second is ensuring that ads/ offers are only sent to customers who want to receive them and at times of their preference. Precise targeting of ads and offers Firstly, in order to ensure the relevancy of ads and offers, Operators need to find precisely targeted customer groups for their marketing campaigns. This means identifying the target group from a very detailed knowledge of customer profiles, preferences and behavior patterns. With the Veris Convergent Context- awareness Center (C³) - a Big Data Analytics appliance from AsiaInfo - Operators gain a detailed understanding of which users have accessed which specific web content/ apps/ services/ web searches, when, where and on what devices. These Data Behavior Insights (DBI) can be mined to extract very precisely targeted customer groups for marketing 3

4 For example, let s suppose Super Operator and music streaming service, Spotify, jointly launch an exclusive Spotify Premium product for young female music fans attending the Glastonbury Music Festival. This offer is specifically designed to target users of competitor streaming services, such as Napster, with an attractive real- time Spotify promotion. Veris C³ s Context Awareness Engine uses Stream Computing technology to continually process network traffic, combining it with customer profile information to generate Data Behavior Insights. So C³ s DBI module can easily create the Target Customer Group for Super Operator and Spotify s joint marketing campaign (see Error! Reference source not found.), in this case: young female music fans (13-25) with Medium or High ARPU and Data Usage who have accessed a competitor s music streaming app in the last month Figure 2: Defining a Target Customer Group with Veris C³ s Exploration Tool Context- sensitive delivery Secondly, even a highly relevant ad can irritate customers if it is delivered at the wrong time, or, worse still, if they have chosen not to receive any sort of advertisement at all. To ensure ads and offers are sent at the appropriate time, to customers that are happy to receive them, Operators need real- time context awareness for each customer in the target group (see the section Real Time Permission Based Opt In for more information). With Veris C³, the Operator can define the real- time context rules that trigger the campaign at the ideal moment for each customer. In the case of the joint Super Operator/ Spotify campaign, this 4

5 trigger would be when the female music fan accesses the music app on her smartphone, at defined points during the Glastonbury music festival. Figure 3: Defining a real- time trigger for a marketing campaign with Veris C³ C³ s Context Awareness Engine identifies the context trigger for each subscriber in real- time, and sends the offer to the customer at the ideal moment. This is a win- win for the Operator, Spotify (or any partner) and the end customer; delivering the offer at a time when the customer will be receptive increases the likelihood of a positive response. This really works using C³, China Mobile is achieving more than double the click- through rates typically achieved through Internet search- based advertising. The paradox of deep customer knowledge The secret to successful use of Big Data Analytics for mobile marketing is to give opted- in customers a positive experience, so that they remain opted in. Operators need to be very sensitive towards end customers concerns about how their personal information is used for marketing purposes. One might think tracking individual customer usage patterns and preferences at such a fine level, using a tool such as C³, would concern customers. But actually, the more detailed the Operator s understanding of each individual customer s personal preferences and usage patterns, the more targeted and relevant the marketing campaigns. With C³ the Operator avoids upsetting the customer with irrelevant campaigns delivered at inappropriate moments. Messages are sent to precisely targeted groups at appropriate times and customers have real- time permission- based controls to opt- in/out. This means subscribers are more likely to engage, understand how their data is used and remain opted- in for the long term. Personal Traffic Analysis directly benefitting customers with Big Data Veris C³ s ability to gain a detailed understanding of each customer s mobile data usage can also be used for Personal Traffic Analysis, enabling the Operator to provide detailed information directly to customers so they can better understand their data usage and bills. For example, C³ can show customers precisely which applications generated which data traffic. 5

6 Figure 4: Personal Traffic Analysis in Veris C³ Personal Traffic Analysis helps call centre agents to answer questions from customers about their data usage, and can be incorporated into a web self- care system or mobile self- service application so that customers can access it directly for themselves. This level of transparency can significantly improve customer satisfaction; for example, using C³ China Mobile has eliminated 30,000 complaints about data bills per year in Sichuan province alone. Real- time permission- based opt- in Veris C³ ensures a good mobile marketing experience once customers have opted in to receive relevant ads and offers, but how does an Operator encourage its customers to opt in in the first place? One approach is to use Real- time Self Service (RTSS) 3, which provides both incentives for customers to opt in to receive C³ promotions, and also puts the customer in control (see Figure 1 above). Operators can also monetize the entire customer experience provided by the RTSS app with fees for turbo boosts and convenience charges for transferring and transforming resources, RTSS creates a win- win for the operator and the end customer. For example, a customer who needs resources (e.g. voice, data, SMS credits) can use the RTSS app to opt in for C³ promotions for a specified period of time, and in exchange receive a resource credit of their choice. The longer the opt- in, the more resource credit is given. If the user wants to opt out 3 See our Real- time Self Service white paper (May 2013), by Mohammed Sha, Director of Product Marketing at AsiaInfo 6

7 again, they can trade opt- in time for resources in the other direction. Adding more value to commercial partnerships A partnership model that is starting to gain traction is Sponsored Data, whereby a third party partner pays for a customer s data usage. This is a means of encouraging the customer to access the third party s content (e.g. advertisements), which they would perhaps otherwise ignore to avoid data charges. An example of sponsored data currently working in practice is AT&T s partnership with Hershey s, in the USA. The chocolate brand rewards AT&T subscribers who engage with its mobile advertising with additional mobile Internet data. The data is paid for by Hershey s and allows users to enjoy more mobile engagement without worrying about their data usage. Veris C³ makes the concept of sponsored data much more powerful, bringing genuine value to the targeted advertising campaigns the Operator can offer to its partners (OTTs and other enterprises in the digital ecosystem). Operators can provide advertisers with real- time context aware advertising whilst, at the same time offering the end customer an award in real time for watching the advert. The net result is a more interesting and valuable service proposition for all parties in the value chain. For example, Super Operator could work with a sports brand, such as Nike, to target subscribers showing an active interest in the FIFA World Cup. Veris C³ s DBI module can define the Target Customer Group as sports fans using mobile Internet data to search for World Cup Schedule. Veris C³ s Context Awareness Engine identifies the campaign s context trigger for each subscriber in real- time, and sends the offer to the customer at the ideal moment. In this instance, the trigger rules could be when the Super Operator subscriber has been browsing the FIFA website for at least five minutes on their smartphone or tablet. Subscribers who meet the campaign criteria would automatically be sent an RTSS push notification, inviting them to watch a Nike video advert in exchange for 10 MB free data and entry into a draw to win World Cup tickets. The subscriber automatically receives the free data, which is immediately visible in the RTSS app, as well as a push notification confirming his entry into the draw. Summary Big Data Analytics enables valuable customer insights, but it must be used carefully. Operators need to be very sensitive towards end customers concerns about how their personal information is used for marketing purposes. If used strategically, with proven tools and processes that have been thought through, Big Data Analytics can not only open doors to new business models, but also give a competitive edge in the market. Veris C³ from AsiaInfo is a subtle tool that ensures end customers receive a good mobile marketing experience. With Veris C³, Operators can: 7

8 Send messages to precisely targeted groups so customers only receive relevant ads and offers Use context- awareness so customers receive marketing messages only at appropriate moments Make data usage transparent to end customers (ie which apps consumed how much data). As part of the Veris BSS suite, C³ can also take advantage of Real- time Self Service to give customers incentives to opt in as well as real- time permission- based control. By delivering a good customer experience, Veris C³ ultimately enables Operators to monetize their customer knowledge through more effective upselling and cross selling, as well as adding value to Over- The- Top partner services without upsetting the customer. China Mobile, the world s largest mobile operator is a live example of this approach. 8

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