I D C C U S T O M E R S P O T L I G H T. Optus Drives increased revenue with Real-Time Campaign Management

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1 I D C C U S T O M E R S P O T L I G H T Optus Drives increased revenue with Real-Time Campaign Management IDC Australia: Level 20, 8-20 Napier Street, Nrth Sydney, NSW 2060 P F Publicatin Date March 2012 Vanessa Thmpsn Spnsred by Emagine Internatinal Intrductin Declining usage in the pre-paid mbile market in Australia frced prviders t rethink strategies n hw t retain existing custmers and als attract new nes. This case study demnstrates hw Optus Pty Ltd delivered recharge revenue grwth and increased custmer retentin t the pre-paid business. Optus Pty Ltd is headquartered in Nrth Ryde, Australia and hlds ver 33% share f the ttal mbile prepaid market in Australia at June With the inclusin f Virgin Mbile, Optus have acquired the greatest share f pre paid mbile custmers in the Australian market. Singtel wn Optus Australia, including Virgin Mbile as a whlly-wned entity f Optus Australia. Singtel serve ver 100 millin subscribers and have hldings acrss 18 cuntries thrughut Asia Pacific. The ttal number f pre-paid subscribers in Australia reached 3.48 millin in June 2011, accrding t the IDC Australia Mbile Services Tracker. Prepaid services fr Optus grew 2% Year n Year (YY) at the end f 2010, bringing the Optus market share f prepaid custmers t 33.6%. In terms f revenue, pre-paid services lifted by a 5% YY in 2010, with a general elevatin in Average Revenue per-user (ARPU) being recgnised thrugh higher grwth f prepaid revenue cmpared with custmer grwth. Slutin Snapsht Organisatin: Optus Pty Ltd Operatinal Challenge: Increasing Average Revenue per User (ARPU) and reducing churn in a cmpetitive pre-paid mbile market. Slutin: Emagine real-time Campaign Management Slutin fr telecm peratrs which included access t the Greenrm knwledge database. Prject Duratin: 12 weeks t get started with nging peratin f campaign management prgrammes. Prject Cst: OPEX-based pay as yu g mdel. Dcument number AU63313V

2 Slutin Faced with declining revenue and increased pressure n custmer retentin in the pre-paid market, Optus identified the requirement fr an intelligent and autmated near real-time campaign management slutin. The initial slutin was t prvide belw the line direct campaigns t target specific custmer sets, in rder t stimulate ARPU, retain custmers and reduce churn. The Emagine slutin cmplemented Optus existing data warehuse slutin by prviding near realtime triggering f custmers int campaigns, and real-time campaign fulfilment f ffers directly t custmers prepaid accunts. The prject was run as a partnership mdel and the prcess began with a series f discvery wrkshps invlving Optus Marketing and IT teams and the Emagine teams. The wrkshps were business led and fcused n custmer lifecycle and the mst effective campaigns t launch, with slutin requirements and implementatin architecture being initial utputs. Optus had a clear view f initial campaigns they were lking t target aligned t the verarching gal f addressing declining usage and declining tp-up frequency. T get the prject up and running quickly, Optus chse t use Emagine s Campaign Management system n a Sftware-as-a- Service (SaaS) hsting mdel. A secure Business t Business (B2B) VPN was set up between Optus and Emagine with Optus requiring 100% data privacy t adhere t the telecmmunicatins (interceptin and access) act 1979 with regard t transfer f third party infrmatin. Optus Prepay Mbile G-Live Architecture (Figure belw) Optus had a clear view f initial campaigns they were lking t target with an verarching gal f addressing declining usage and declining tp-up frequency. Figure 1 A number f interfaces were then enabled t cnnect Emagine, Optus and pre-paid custmers: - Inputs t Emagine Emagine receives a near real-time feed f custmer infrmatin directly frm the pre-paid Intelligent Netwrk (IN) fr Emagine t detect and trigger custmers autmatically int the mst relevant campaign. Infrmatin gathered frm the IN netwrk included recharge data, sales channel, amunt, date/time and lcatin infrmatin IDC

3 Emagine were set up as a channel in the Optus Custmer Relatinship Management system n the Optus Enterprise Data Warehuse and the campaign daily white list, with campaign pt-ut data extracts autmatically sent t Emagine. - Emagine t the Custmer Interactin frm Emagine with the custmer includes 2-way persnalised cmmunicatins via SMS which ccurs in real time. Interactin als ccurs via , including website click thrughs. - Rewards and Bnus Offers t the custmer, such as airtime credit, are autmatically fulfilled via the Emagine Real-time Reward and Bnus gateway directly nt the Prepay IN netwrk. Third party rewards, such as mvie tickets were ffered via a number f 3 rd party suppliers using plug-ins t the Emagine Reward and Bnus gateway. - Emagine t Optus All campaign steps and respnse histry is laded autmatically back int the Optus EDW, s that Optus maintains a cmplete single view f custmers This initial implementatin enabled the end-t-end autmatin f the specified Optus campaigns with campaigns being executed in near real-time. In this example, Optus wanted t stimulate pre-paid recharge via specific retail channels and required the rewards and bnus system t align t this. With Optus having a number f pre-paid rate plans, Emagine were required t manage cmplex ff-net and n-net business lgic t be replicated back int the Emagine platfrm. Custmer Challenges The initial catalyst fr Optus t implement a campaign management slutin was t stem the current custmer attritin and t increase frequency f custmer recharge. Optus had defined the verall utcme but were nt clear n the rt cause f the challenge. After initial evaluatin, Optus selected Emagine t implement a real-time campaign management platfrm, t assist in strengthening custmer lyalty and increasing incremental revenue. As with many technlgy implementatins, a number f initial challenges were faced by Optus with regard t the campaign management slutin: Time t Market: Optus needed a slutin that it culd bring t market in a relatively shrt amunt f time. The Emagine implementatin is built n set f pen API s, reducing develpment time and effrt. Near Real-Time: Increasing cmpetitin in the pre paid market and pressure n pre paid custmer lyalty required a near real-time custmer feedback mechanism. It was essential fr Optus t build end t end trigger based campaigns enabling client interactin in near real time. Campaign Ramp up: 15 initial campaigns were identified t demnstrate results and enable the next rund f campaigns fr Optus. Fllwing n frm the initial campaigns, Optus increased the number and type f campaigns t include new custmer n-barding, recharge stimulatin, custmer retentin and de-active win-back campaigns. Within a 3 mnth perid, the number f cncurrent campaigns Optus were running thugh the Emagine platfrm was increased t 60. Typical Prepay Custmer Lifecycle Campaign types 2012 IDC 3

4 Figure 2 Reprting: The standardised reprting f campaign success metrics was stipulated by the Optus senir management team. Emagine were able t manipulate reprting criteria and map t the Optus requirements. With the high visibility f the prject frm a senir management perspective, having a sund reprting structure was imperative. External Management: Optus engaged Emagine t prvide a Managed Marketing Operatins service, as they did nt have the internal capability t manage campaigns f this nature. This meant that Emagine managed the applicatin, cnfigured and the slutin, executed campaign and prvided campaign reprting and analysis back t Optus. Prject Discveries Fr Optus, vercming a number f rganisatinal challenges was imperative t deliver n the required metrics fr success f this prject. During the prject implementatin, a number f discveries were made that articulated key learnings' and hw challenges were managed: Champin/Challenger: A champin/challenger apprach was taken fr the campaigns, whereby the champin versin f a campaign, defined as the campaign with the best success rate t date, was cntinually imprved upn. Mdificatin ccurred n ne element f the campaign t create a number f challenger campaigns. As an example, challenger campaigns may have different message text, marketing channels (SMS, v s ) and different reward types, amunts, timing r frequency. The champin challenger methdlgy enabled Optus t cntinually imprve perfrmance frm the campaigns. Campaign Review: In the initial implementatin, campaigns were reviewed n a daily basis, reducing t 2-3 times per week as campaign generatin became mre manageable. Emagine als applied their glbal Best Practice Campaign Management Framewrk t cmplement the campaigns selected by Optus and assist in the generatin f new campaign ideas which were then implemented. The Emagine Custmer Value Delivery Manager facilitated the Optus campaign management jurney frm inceptin twards best practice. Benefits The cmmercial mdel fr the Emagine campaign management platfrm is a fixed price fr implementatin, fllwed by a mnthly subscriptin license. The subscriptin includes the Emagine Campaign Management Platfrm, the Managed Marketing Operatins service, 24 x 7 custmer supprt and access t all new releases and upgrades. A number f direct bttm line benefits have been realised as a result f the initial prject: With the revenue lift recgnised by Optus in pre-paid paid services, there was significant incremental revenue stimulatin using the Emagine campaign management platfrm. Optus set a psitive ROI target fr the entire prject in the first 6 mnths f peratin and this was achieved by the Emagine slutin IDC

5 Cnclusin Optus have increased pre-paid services by a substantial 5% YY, t June 2011 with Mbile Service Prviders in Australia cntinuing t fcus n increasing verall ARPU by prviding additinal value t mbile plans. With a mbile penetratin at a rate f 131% in Australia and the bld grwth strategy frm its majr rival in the Australian telecm market, it is imperative fr Optus t remain cmpetitive. As cmpetitin increases and cmmunicatins markets becme saturated, deep custmer insight beynd tday s practices will becme even mre imprtant t cntinue grwth with healthier margins and market share. Telecm peratrs like Optus can prvide a strng pint f differentiatin by implementing a real-time campaign management slutin designed t help them better manage and service their custmers. Ging frward, telecm peratrs must als find innvative ways t leverage the custmer advcates they have. This means uphlding lyal custmers with higher than average ARPU, lwer churn rates and lwer service csts, as well as recruiting new custmers. Part f this invlves effectively cllecting custmer data frm a variety f surces, channelling it in the right directin and taking actin in real-time based analysis f all apprpriate custmer data sets. Methdlgy This prject and cmpany infrmatin cntained in this dcument is based n bth primary and secndary research methds. Infrmatin surces included Optus Australia and Emagine Internatinal, with ther surces frm IDC Australia; IDC Australia Quarterly Mbile Services Tracker, Q110 thrugh Q211. A B O U T T H I S P U B L I C A T I O N This publicatin was prduced by IDC G-t-Market Services. The pinin, analysis, and research results presented herein are drawn frm mre detailed research and analysis independently cnducted and published by IDC, unless specific vendr spnsrship is nted. IDC G-t-Market Services makes IDC cntent available in a wide range f frmats fr distributin by varius cmpanies. A license t distribute IDC cntent des nt imply endrsement f r pinin abut the licensee. C O P Y R I G H T A N D R E S T R I C T I O N S Any IDC infrmatin r reference t IDC that is t be used in advertising, press releases, r prmtinal materials requires prir written apprval frm IDC. Fr permissin requests cntact the GMS infrmatin line at r Translatin and/r lcalizatin f this dcument requires an additinal license frm IDC. Fr mre infrmatin n IDC visit Fr mre infrmatin n IDC GMS visit Glbal Headquarters: 5 Speen Street Framingham, MA USA P F IDC 5

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