Mikaili Lilly
description
Transcript of Mikaili Lilly
Copyright © 2006 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Driving High Performance for a Large Wireless Communication Company Through Advanced Customer InsightAccenture Consulting – CRM Customer InsightPresenters: Ramin Mikaili and Lynette Lilly
2Copyright © 2006 Accenture All Rights Reserved.
In saturated competitive markets, the economics of acquisition and retention becomes painfully obvious and requires a shift in the marketing mix from using the 4 Ps to the 4 Rs. 1
1. James G. Barnes book "Secrets of Customer Relationship Management" McGraw Hill copyright 2000, page 22-23
Why Customer Insight?
4 Ps
Price
Product
Promotion
Place
4 Rs
Relationships: effective communication, trust, commitment, understanding customer needs
Retention: targeted incentives, rewards, loyalty programs for specific segments
Referrals: value selling, Communication
Recovery: strong win-back programs, product and service development
Acquisition determines how fast a company can grow. Retention determines whether a company will survive over time.
3Copyright © 2006 Accenture All Rights Reserved.
Levels Of Insight
Retention, up-sell, or service
Acquisition, capital investments
■ Mass media buys■ Corporate Branding■ M&A/Alliance Strategy■ Corporate Strategy■ Price Plans/Bundling■ Capital/Technology
Investment Strategy
Corporate Direction ■ Network Build■ New Market Entry■ IT project prioritization■ Supply Chain Strategy■ Promotions■ New Business/Growth
Strategy
■ Acquisition campaigns■ Network decisions■ Retail Strategy■ Channel Strategy■ Product prioritization■ POS technology
■ Store design/inventor■ Accessory mix■ Alliance prioritization■ Marketing:
■ The “P’s R’s”■ Bundles
■ Retention offers■ Cross sell of value
added services■ Differentiated
customer service
■ Telesales calling lists
■ Web site personalization
■ Lifecycle communication plan
5-10 Segments
50-100 Cells
Millions of Customers
Illustrative Business DecisionsLevel of Insight
Various analysis types are employed to make sound decisions about corporate direction, acquisition and capital investments, retention, ups-sell or service.
4Copyright © 2006 Accenture All Rights Reserved.
ApproachAccenture implemented a phased approach for a successful Customer Insight Revenue Generation program.
-20%
0%
20%
40%
60%
80%
100%
% o
f P
ote
nti
al
Va
lue
Ca
ptu
red
Insight Obtainment
Insight Application Develop tactical targeting
tools Apply test and control
methodology to examine/generate hypotheses
Identify the customer data requirements for enhancing the effectiveness
Develop optimal campaign program plan
Develop long term road map
Sustained Customer Insight Institutionalize insight throughout the
organization Ingrain new processes in the organization
ILLUSTRATIVE
Insight Services Extend/expand
the scope of revenue growth strategy to include other channels, customer base
Infrastructure Develop
technology based capabilities
Value CaptureValue CaptureValue TargetingValue Targeting
Phase 1 Phase 2
Leverage Results to Entire Base
Leverage Results to Entire Base
Phase 4
Results Tracking & Monitoring
Results Tracking & Monitoring
Phase 3
Establish Growth Strategy
Prove Effectiveness
Improve Efficiency
• Identify growth opportunities
Develop a case
Establish benefits
Prioritize initiatives
5Copyright © 2006 Accenture All Rights Reserved.
Client Situation■ The Lifecycle Group is responsible for maximizing the
lifetime value of the customer base■ Their traditional focus has been retention. Team has
had significant success reducing churn and increasing the portion of the base under contract
■ As these churn programs have matured, focus turned to proactively growing the revenue of existing customers
■ However, the carrier lacked key infrastructure and capacity to launch a comprehensive cross sell/up sell program
Significant increases achieved for pilot, base, and lifetime incremental revenue
Significant increases achieved for pilot, base, and lifetime incremental revenue
Value Targeting:− Identify, profile and analyze the segments− Assess market and identify opportunities− Develop portfolio of cross-sell and up-sell pilot opportunities
Value Capture:− Select opportunities and develop business case− Create pilot launch plan and identify key metrics− Prepare channels and launch pilots − Monitor pilots and create summary report of results
Leverage Results to Entire Base− Design campaigns based on pilot results− Create launch plan and business case for campaigns− Launch campaigns
Value Targeting:− Identify, profile and analyze the segments− Assess market and identify opportunities− Develop portfolio of cross-sell and up-sell pilot opportunities
Value Capture:− Select opportunities and develop business case− Create pilot launch plan and identify key metrics− Prepare channels and launch pilots − Monitor pilots and create summary report of results
Leverage Results to Entire Base− Design campaigns based on pilot results− Create launch plan and business case for campaigns− Launch campaigns
BI Offerings Solution Results
Company Description■ A leading US provider of fully integrated, wireless communications services. ■ Focuses its products and service towards Business Customers■ Leads the Industry in Customer Retention
Increase RevenueIncrease Revenue
Case I: Revenue Generation for a Major Wireless Company
6Copyright © 2006 Accenture All Rights Reserved.
Case I: Growth Segmentation Analysis Framework
Rate Plan - Price Point 1
-10% +10% Unstable Trend
Separates customers to limit “noise” in trend analysis
H
M
L
1 2 3 Undefined/Error
H1 H2 H3
M1 M2 M3
L1 L2 L3
Ave
rag
e S
ub
scri
ber
Ch
arg
e
Subscriber Charge Trend
6 Month
6 month subscriber average of key charges.
Forecast change in revenue over 6 months based on a regression of monthly subscriber charges to smooth month to month variations
Cut-offs chosen to show significant trends in the movement of revenue and to split the base roughly into three parts
Cut-offs chosen to split the base into roughly three parts
1
2
3
4
5
The Revenue Change matrix is the tool we use to analyze the base
Rate Plan - Price Point 2
Identify & Profile segments
7Copyright © 2006 Accenture All Rights Reserved.
The wireless industry is exhibiting the telltale signs of a maturing and potentially unhealthy market.
Note 1: Includes Consumer Post-Paid, Business, Resellers and Pre-Paid Subscribers.Source: CTIA, Morgan Stanley, Client estimates
■ $80B industry with revenues with 12% Cost of Acquisition■ New products and services still compelling in value■ Bundles are becoming increasing important ■ Convergence is bringing new opportunities to the market■ Market is at an inflection point■ Focus is shifting from revenue growth to profitability
The Good News:
■ Declining new subscriber growth■ Saturation of high profitability wireless users ■ Market inefficiencies and gap between customer marketing and sales is
adding to declining margins■ Largest remaining sources of growth are lower end■ Switchers out number new entrants by 2:1■ LWNP is not an “if” but a “when”■ Spectrum and network constraints abound■ Untraditional entrants are shifting the value chain■ Bottom-line economics are deteriorating
The Bad News:
Rev./User1 $46 $45
Churn 2.6% 2.7%
CPGA $286 $294
Min. of Usage 188 249
Revenue
Cost
Attrition
Decreasing Customer Value
$46
3.1%
$340
343
Yield2 $0.24 $0.18 $0.13
Annualized Subscriber Growth
Ann
ualiz
ed G
row
th R
ate
June 85 June 01
0%
50%
100%
150%
200%
250%
Case Study II: Insight Driven Customer Strategy
8Copyright © 2006 Accenture All Rights Reserved.
Case Study II: Business Issues
• Which new products are most likely to have fastest, profitable uptake and by which customers?
• Which new products will attract new customers that look like our most profitable cells?
• How do we launch a new product to maximize adoption?
• Which handsets are best for our bottom line (by customer)?
• How do we determine inventory and store shelf to best meet the
needs of local customers?
• How do we better deploy Network capital to improve service and loyalty?
• What geographic areas should be our priority in rolling out?
• Where can we invest to turn around profitability issues?
• How do we maximize new product adoption?• How should we route calls and handle an individual
customer contact?• How do we respond to a competitor price change? • Can we institute a customer loyalty
program to reduce churn?• How do we handle Increasing volumes
into the call centers?• What is the likely reason thus
customer is calling and how can we best serve profitably?
• How do we prioritize IT infrastructure development to optimize customer experience
and our bottom line by segment?
• Which potential alliance partners’ support our customer strategy?
• Which alliances are most likely to attract and retain the “best” customers? On what terms?
Sales
Customer Service
Information Technology
Supply Chain
AlliancesProduct
Development
Network
Customer Insight
In this saturated market, the company was facing many key business questions that now can be answered with strong analytical support.
9Copyright © 2006 Accenture All Rights Reserved.
The first step was to create a 360-degree view of the customer that incorporated factors from all key areas.
Component of Segmentation Variable Category
Charges from the billing system
Minutes of use – used as a proxy for cost to serve
Minutes of use
Channel preferences
• Access Charges• Overage Charges• Roaming Charges
Plan
Sample of Fields
• Channel (retail, agent, etc.)• Distribution (internet, etc.)
• Product group• Product subgroup• Price plan
Profitability
~40 variables
Behavior
~130 variables
• Call Detail All Minutes• Call Detail Home
Minutes• Minutes of Use - Air
• Call Detail All Minutes• Call Detail Home
Minutes• Minutes of Use - Air
Demographics
~400 variables
Demographics• Age• Income• Ethnicity• Marital Status• Occupation
Lifestyle• Golf• Boating• Gardening
Case Study II: Approach
10Copyright © 2006 Accenture All Rights Reserved.
Case Study II: Strategic Segmentation
Top Level Strategic Segments
Population MultipleSeg C
Segment D
Seg B Seg A
SegE
Value Factors
Be
ha
vio
r F
act
ors
(Average)
This analysis yielded five strategic segments and the decision was made to further analyze the cells below these for insights in many key decisions areas.
Sources: Customer Data
11Copyright © 2006 Accenture All Rights Reserved.
Case Study II: Market Research Results
SegmentMore Likely to
HaveLess Likely to
Have
Product Features1 Expressed Interested in the Following Data
Products2
A
B
C
D
E
• International LD• Cellular Insurance• Mobile-To-Mobile• Enhanced Voicemail• Wireless Data
• Email• Instant Messaging• Internet Gaming• File Transfer• Internet Shopping
• News• GPS
• Cellular Insurance• Mobile-To-Mobile• Wireless Data
• Email• Instant Messaging• Internet Gaming• File Transfer• Internet Shopping
• News• GPS
• Cellular Insurance• Wireless Data
• Not Interested in Data Products
• Cellular Insurance• Mobile-To-Mobile
• Email• News• GPS
• Roadside Assistance • Cellular Insurance• Mobile-To-Mobile• Enhanced Voicemail• Wireless Data
• Not Interested in Data Products
1 Source: Client Data. Segments were at least 20% different from average to exhibit listed behavior.2 Source: 2001 Convergence Audit. Segments were at least 20% more likely than average to exhibit listed behavior.
Using primary research already performed, we were able to determine key product areas for top segments.
12Copyright © 2006 Accenture All Rights Reserved.
Case Study II: Market Research
Market Share Leader in Segment
Note 1: Includes carriers such as Nextel, Rural Cellular, US Cellular and respondents who did not indicate a carrier.
Note 2: Adding values may not total exactly 100% due to rounding.
SegmentCompany 1 Company 2
19%
22%
22%
21%
Company 3 Company 4 Company 5
11%
12%
18%
17%
20%
14%
13%
16%
18%
16%
11%
14%
7%
10%
3%
3%
23%17% 14% 7% 4%
Others1
Total2
19%
23%
26%
21%
29%
100%
100%
100%
100%
100%
A
B
C
D
E
Company 6
6%
4%
7%
8%
7%
Market Share By Segment
Source: 2001 Convergence Audit. Data is from response to question about, “who is your wireless carrier?”. Market versus Client comparison is made using Claritas data and should be used for relative comparison only. Data does not exactly reflect Client’s base.
In highly competitive industry with high churn rates, it was critical to identify the addressable market in each area, and to find out where those customers were if they were not in our base.
13Copyright © 2006 Accenture All Rights Reserved.
What is Customer Insight?
Customer Insight is a capability that requires the integration of business processes to drive actionable strategies and tactics.
From our perspective, Customer Insight provides a holistic platform for the management, analysis, and application of information to drive business decisions across a corporation.
Integrated View of the Customer
Adaptive Campaign
Management and Execution
Intelligent, Insight Driven Interactions
Gather & Manage DataGather & Manage Data Apply InsightApply InsightAnalyze Data/Draw InsightAnalyze Data/Draw Insight
Profiling and Propensity Modeling
Segmentation and Value Analysis
Close the loop so customer responses are quickly incorporated into future analytics
Customer Insight
Customer Insight Framework
Data Enrichment
and Refinement