Marketing Automation:

Transcription

1 Marketing Automation: Wiring the Telecommunications Industry for Marketing Success A Frost & Sullivan White Paper

2 frost.com Customer Churn: The Bane of the Telecommunications Industry... 3 The Need to Upgrade to a Better Marketing System... 4 Customer Segmentation... 4 Personalization... 4 Customer Intelligence... 4 Rebooting an Aging Model: Marketing Automation in Action... 5 Churn Rates... 5 How MAS Helps Reduce Churn Rates... 5 ROI Measurement... 5 How MAS Helps Measure ROI... 6 The Bottom Line... 6 contents

3 Marketing Automation: Wiring the Telecommunications Industry for Marketing Success CUSTOMER CHURN: THE BANE OF THE TELECOMMUNICATIONS INDUSTRY One of the most competitive industries in the world, the telecommunication industry is a complex ecosystem of carriers, retailers, resellers and customer care centers. It has traditionally been a largely customer-centric industry, where service has been key to customer retention. The competition is fierce as every service provider struggles with steep customer churn rates and high customer bargaining power. The battle to grab a coveted customer is fought street to street and house to house. With almost every telecommunication service provider offering similar services, the only way to differentiate from the competition is to offer a personalized bundle to every customer and consistently communicate at every customer touch point in the hope to create a long-term relationship with the customer. As technology continues to evolve and new entrants keep disrupting the market, the service bundles and promotional offers become more tactical and seasonal stop-gaps, and insufficient to sustain as competitive advantages. As a result, the real challenge for service providers is to find optimal ways to engage with customers and be agile in the marketplace. The providers have to be extremely efficient at making personalized offers based on individual requirements of their customers. However, the biggest hurdle in being agile is to effectively communicate new offerings, promotional packages and value-adds to the customers. Once the provider has acquired a customer, it is critical to constantly strive to maintain a relationship so that it can retain the loyalty of the customer. Figure 1: Factors Influencing Churn KEY TAKEAWAY: TURN THE BATTLE AWAY FROM PRICE TOWARD VALUE FACTORS PREVENTING CHURN FACTORS DRIVING CHURN HIGH IMPACT LOW LOW IMPACT HIGH Better choice, quality, speed... from Competitor Expiry of Promotion or end of lock-in period Competitor Discounts Out-competed on the basics PRICE AND PRODUCT Do it better, faster, cheaper Exclusive content (sports, international, PPV...) Best-in-class value Best-in-class QoE Bundles with broadband, cellular, etc. Interrupted or glitchy services/devices Bandwidth throttling and data caps Old school STBs and remotes Obsolete, dysfunctional technology TECHNOLOGY Cutting edge for existing offerings, lateral offering expansion User-friendly searchable TVE Personalized profiles Whole-home services Advanced interactive applications Slow/expensive issue resolution Confusing/ overhyped messaging Poor customer service You need the customers, not vice versa MARKETING & CUSTOMER SERVICE Nice, responsive people Service value reiteration via ads, mailers and direct outreach Contract lock-in and loyalty rewards Exit request mgmt Feedback loop between customers and product team Source: Frost & Sullivan 3

4 frost.com Sales in the telecommunications market can only go that far. Ultimately, it s the marketing mix that is the determining success factor for the industry. Frost & Sullivan s paper, Marketing Automation: The Secret Sauce to Marketing-Driven Sales Growth and Empowerment, discussed in detail the value proposition of Marketing Automation solutions. This paper takes a closer look at how that value proposition helps telecommunication companies reduce subscriber churn and optimize marketing return on investment (ROI). THE NEED TO UPGRADE TO A BETTER MARKETING SYSTEM Frost & Sullivan s research has uncovered significant challenges facing telecommunication companies in their ability to effectively communicate with and nurture their customer base. The market has also reported back to us on how competitively critical this can be in reducing churn. Let us first discuss some of the key marketing challenges facing the telecommunications market. Customer Segmentation Telecommunications is a critical requirement for the functioning of any society. Telecommunication customers are extremely diverse and range from businesses in every vertical market and of every size, down to the individual consumer and all have varied needs. The challenge for any provider is to find a single platform to effectively market to this broad gamut of customers in a personalized way. For example, one individual customer might be more interested in the tiered pricing when it comes to the Pay TV component of the bundle, while another might be keen on international data plans. Marketers, therefore, have to ensure that they know the context of their messaging before they deliver any content to their customers. Customer segmentation based on customer profiles, historical transactions and brand interactions helps a marketer identify the context needed to form the pretext of any conversation. Personalization Any message that goes out to customers has to be fine-tuned to their individual needs in order to be effective. A service provider should be able to define an offer for individual customers and, most importantly, be able to deliver on that offer. There have been numerous cases highlighted in the public domain of customer frustrations stemming from the perceived failure of the service provider to deliver on the contracted offering. Telecommunication companies have numerous customer touch points, both online and offline. Customer interaction, therefore, should be streamlined across all communication channels, providing a unified and personalized voice to the customer instead of the customer getting the runaround. Customer Intelligence Marketers need to be able to access vital customer information in order to learn various motivations and concerns of every individual customer. Such intelligence is critical in meeting customer expectations and providing a level of service that can go far in establishing industry best practices and helping the operator gain a critical competitive advantage. Technology allows us to access and store information on the go based on user profiles. For example, if a service provider knows that a customer frequently travels overseas, it can increase its chances of upselling an international roaming service for the customer. 4

5 Marketing Automation: Wiring the Telecommunications Industry for Marketing Success REBOOTING AN AGING MODEL: MARKETING AUTOMATION IN ACTION We have discussed the marketing challenges faced by the telecommunications industry, while also establishing the strategic imperative and dire need for the industry to reinvigorate its marketing efforts. Let us now look at how marketing automation software (MAS) provides exactly what the industry has been longing for using Oracle Marketing Cloud for Telecoms as an example. Churn Rates Typically, subscribers bounce from one service provider to another. The reasons are multiple and range from poor service to the expiration of a promotional offer. Churn rates have a significant impact on the provider s bottom line and is the biggest cause of concern. Being able to understand which customers are likely to leave and the ways in which one can improve the likelihood of customers staying with the provider can make a huge difference to the overall functioning of the provider. Just as important is to know which customers are not worth going after. For example, the provider can identify customers that had a poor data roaming experience and initiate a nurture campaign to ensure they find ways of optimizing their experience going forward. Being able to look at customers online and offline interactions such as that from social media, website activity and billing patterns, can empower the marketing teams to proactively make the best offer and reduce churn rates. How MAS helps reduce churn rates Predictive Analytics: A number of service providers have predictive analytic programs to analyze the digital body language of customers. With Oracle Marketing Cloud for Telecoms, the provider can efficiently capture customer communications and share the information with the predictive algorithms for smarter and more effective customer interactions. The provider can determine what triggered a specific customer response and why. Knowing this is crucial to predict whether that customer is likely to churn. Oracle Marketing Cloud for Telecoms constantly collects customer information that helps predictive modeling around churn probability become more refined over time. Oftentimes, the challenge with digital body language is that there is not enough information about a customer. It is difficult to convince customers to fill out their information on a Web form or a survey. Oracle Marketing Cloud for Telecoms helps resolve this problem with an application in its Appcloud called Progressive Profiling. Through the Progressive Profiling feature, customers simply need to fill out small pieces of information on their landing page visits. The application constantly monitors and tracks these online customer interactions and updates the customer s profile with the most up-to-date digital body language it was able to glean through that interaction. This provides marketing and sales with the latest information about the customer. ROI Measurement Telecommunication companies deal with an enormously large amount of subscribers that choose from an equally daunting array of bundle offerings, such as different levels of quad- or triple-play service, Pay TV bundles or different broadband speeds. However, from a marketing standpoint, the challenge is to identify the marketing ROI across different sales channels for different customer segments and bundles. The content for engagement campaigns for these different customer segments also needs to be pulled from multiple sources spanning the telecommunication provider s marketing collateral and down to channel partners localized marketing content and promotions. 5

6 frost.com How MAS helps measure ROI For a telecommunication company, typically, there are multiple different customer and prospect segments, depending on their subscription usage behaviors and online and offline interactions. The sales and marketing tactics also wildly vary for each one of these segments. The sales teams have to cater to a wide range of demands from their respective customer segments. Oracle Marketing Cloud for Telecoms stores all campaign-related information to help the marketing and sales teams identify the resources spent on each channel and measure the effectiveness of each channel. Oracle Marketing Cloud for Telecoms further enables marketing and sales teams to identify segments and customers across channels that yield an optimal return on investment, while identifying dead leads that are not worth pursuing. This greatly helps reduce the cost per customer acquisition and optimizes the customer retention cost. In addition, Oracle Marketing Cloud for Telecoms provides a comprehensive view of each prospect s or customer s buying journey. It demonstrates the impact of marketing initiatives on revenue and ties all the information together to provide a powerful dashboard that facilitates decision-making inside the organization. THE BOTTOM LINE This paper has highlighted the critical challenge of subscriber churn within the telecommunications industry. Marketing is the secret sauce that can help companies within this market reduce churn rates and establish renewable relationships with their subscribers. Marketing innovation through MAS finally brings control of multi-channel marketing back to marketers. With MAS, marketers are equipped to own the communication channels and maintain consistent customer relationships using comprehensive digital profile information stored in the solution. As sales cycles continue to shrink, marketers will need MAS to effectively manage customer relationships by collaborating with the sales team so that the conversations do not fall through the cracks, while ensuring that there is accountability associated with marketing campaigns. As seen through the vendor spotlight on the Oracle Marketing Cloud for Telecoms, a vibrant vender community is ready to help telecommunication companies streamline their marketing strategy and create a sustainable competitive advantage that could become an industry benchmark. Oracle Marketing Cloud for Telecoms offers business-critical tools, such as revenue performance management and progressive profiling, which help marketers measure the attribution for each marketing channel and manage budgets more effectively. MAS solutions offer the intelligence required to manage customer lifecycle from acquisition through retention. They also provide a platform to constantly create up-sell opportunities thanks to the customer-nurturing capabilities they bring to the table. 6

7 Auckland Bahrain Bangkok Beijing Bengaluru Buenos Aires Cape Town Chennai Colombo Delhi/NCR Detroit Dubai Frankfurt Iskander Malaysia/Johor Bahru Istanbul Jakarta Kolkata Kuala Lumpur London Manhattan Miami Milan Mumbai Moscow Oxford Paris Pune Rockville Centre San Antonio São Paulo Sarasota Seoul Shanghai Shenzhen Silicon Valley Singapore Sophia Antipolis Sydney Taipei Tel Aviv Tokyo Toronto Warsaw Washington, DC Silicon Valley 331 E. Evelyn Ave., Suite 100 Mountain View, CA Tel Fax San Antonio 7550 West Interstate 10, Suite 400 San Antonio, TX Tel Fax London 4 Grosvenor Gardens London SW1W 0DH Tel +44 (0) Fax +44 (0) GoFrost myfrost@frost.com Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today s market participants. For more than 50 years, we have been developing growth strategies for the Global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies? For information regarding permission, write: Frost & Sullivan 331 E. Evelyn Ave., Suite 100 Mountain View, CA 94041