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Similaire à Customer Value - Managing Acquisitions through Retention in Competitive Market
Similaire à Customer Value - Managing Acquisitions through Retention in Competitive Market (20)
Customer Value - Managing Acquisitions through Retention in Competitive Market
- 1. 3rd Annual Telecoms in Africa:
Customer Loyalty & Retention Conference
Sathya Karthik R
© Abiba Systems | www.abibasystems.com
- 3. Category 2005 2010 2014 (est.)
Subscriber
133.55 506 911
Base
Penetration 14.30% 41.00% 62.4%
ARPU ($) 14.5 10.34 >6
3G
Key Drivers Voice Voice, SMS
VAS
Acquisition,
Business Network,
Network Retention,
Priority Acquisition
Profitability
Customer
Market Share Wallet Share
Focus
Hottest: Mobile > 65% , Internet > 40%
Hot in mobile: Mobile > 65% , Internet > 40%
Hot in Internet: Mobile < 65% , Internet < 40%
Coolest: Mobile < 65% , Internet < 40%
© Abiba Systems | www.abibasystems.com
- 4. 20 105%
18
99% 99% 100%
16 97%
98%
99.30%
14
95%
12 94%
90%
10 9 90%
8
6 85%
6 5
4
4 3 3
2 80%
2
0 75%
Kenya Algeria Botswana Egypt Nigeria Sudan Tanzania
Number of Operators Prepaid Base % of Total
• Intense competition – choice for customers
• Rapidly increasing penetration
• Very high churn
© Abiba Systems | www.abibasystems.com
- 5. Subscriber base Vs ARPU
1000 16
900 14.5 14
13.4
800
Subscriber base (Mn)
12
700
10.34 10
600 561.18
ARPU ($)
506
500 8
7.5
400 6
280.7
300
4
200 133.55
100 2
0 0
2005 2007 2010 2012
Subscriber Base ARPU
© Abiba Systems | www.abibasystems.com
- 6. Gabon, Ghana, Kenya, So
Benin, Chad, Democratic
uth
>3 Republic of
Africa, Nigeria, Sudan, Tan
Congo, Uganda
zania
No. of operators
Africa
<=3 Ethiopia, Eritrea, Guinea, Algeria, Botswana, Egypt,
Togo Tunisia
<= 50% >50%
Mobile Penetration
© Abiba Systems | www.abibasystems.com
- 7. • ABIBA Systems is a Business Intelligence and Analytics company based out of Bangalore, India
• Our industry focused product and services portfolio is getting wide acceptance.
• We offer a consulting based approach to identify cost effective solutions to enhance the
decision making capabilities of senior management.
Our solution approach
Domain specific
pre-built solutions
Lower TCO to ensure Rapid deployment
higher ROI for quick wins
Business User friendly
solutions
Top BI & Analytics
Companies
Our Clients
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- 8. Up sell (new
product/service)
Value
Retention
Cross-sell
Re activation
Acquisition
Life stage
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- 9. Differentiated Profile the customers
and employ retention
approach based on
approach to maximize
lifecycle of customer revenue from retained
to enhance value customers
Revenue
Attack ‘entry point’ Enhance revenue from
by improving quality ‘terrorist’ customers
of acquisition
© Abiba Systems | www.abibasystems.com
- 10. High ABIBA Competition Penetration Matrix
Retention
Penetration
Life Time Value Life Time Value
Up-sell
Acquisition Acquisition
Low
Cross – Sell
Up Sell
Low High
Competition
© Abiba Systems | www.abibasystems.com
- 11. • Additional services
• Increase wallet share
Terrorists Already taken care?
• Loyalty
• Better services
• Benefits
Profitability
Steady
??? eddies
Increase wallet share
Do not focus on retention
Average Life of Customer
Operator Focus ---- Maximise(Life * ARPU) - Cannot retain – then enhance
revenue; have to sacrifice ARPU to enhance life
© Abiba Systems | www.abibasystems.com
- 13. Prepaid subscribers – little information
Cost of acquisition > initial ARPU
Competitive market – getting Multi SIM users
Distribution driven – differing objectives
Strategic focus – Sub.base and market share
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- 14. Metrics Scenario 1 Scenario 2
No of customers Acquired 1000 750
ARPU (in USD) 6 8
Annual Churn Rate 60% 48%
Customers retained 400 390
Cost of Acquisition/Customer (in USD) 12 15
Total Acquisition Cost 12000 11250
Revenue 48600 53280
Profit 36600 42030
A targeted acquisition results in
•Lower churn
•Higher ARPU
•Increased revenue
•High Profits
© Abiba Systems | www.abibasystems.com
- 15. Scenario 1 Scenario 2
1000 750
Customers acquired
6 8
ARPU (in USD)
60% 48%
Churn Rate/ annum
400 390
Customers retained
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- 16. Scenario 1 Scenario 2
12000 11250
Cost of acquisition
48600 53280
Revenue
36600 42030
Profit
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- 18. The propensity of a pre-paid customer churning is three to five times that of a
post-paid customer.
“ It is costing operators 8 to 10 times to acquire a new customer than to retain
existing customers” – Gartner
Churn rate in emerging markets is averaging > 50% p.a and is expected to go up
further with new operators and MNP.
A loss of just 10% of its high value subscriber base amounts to a loss of 85% in
revenues for the company – Dataquest. e.g. In some markets – ARPU of older
valuable subscribers is about $20 – while for new prepaid subscribers is <$2
Churn cost global telcos $10 billion annually in the form of
customer defection -Telecommunications Online
© Abiba Systems | www.abibasystems.com
- 19. The matured
approach
Value based
WAR+Analysis Now
retention
Proactive retention – Mass, higher cost,
customer Beyond 48 months
Effectiveness
dormancy
management fatigue, low
effectiveness
Reactive, higher cost, 24 months to 48
Reconnections low life post months after launch
reconnections
high costs, low life Up to 24 months
Only acquisition after launch
post connections
Maturity
© Abiba Systems | www.abibasystems.com
- 20. Limited customer information
Minimal customer engagement
when compared to Postpaid Very low exit barrier
Low Loyalty levels and sticky Very Low ARPU which does not
factor justify ‘generic’ retention
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- 22. Set Clear CLM Objectives Value based approach
Control at entry – channel
management, brand fit, Cost of acquisition
No retention at any cost – ROI driven
If you can’t retain - ARPU enhancement
No customer fatigue OR dissatisfaction
© Abiba Systems | www.abibasystems.com
- 23. Whom should I
retain / acquire? CLV Response Modeling
BI & Segmentation
Who will respond to
What is happening? the campaign?
How long can the
customer be
retained ? Survival Analysis
Why is the customer
churning ? Profiler
Churn Prediction
Actionable Decisions
Which are the
Who is churning? better campaigns ? Recommendation
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- 24. Data Mart
Campaign Planning
Pre Campaign Post Campaign
Analytics Target Analytics
Campaign
Location Analysis Sampling Analysis
Hot Spot Analysis Reports
What -if
© Abiba Systems | www.abibasystems.com
- 25. Understand
customer behaviour
and drivers for
churn
Assist good quality
and foil poor quality Retain the high
acquisitions value subscribers
Improved
ARPUs by
upselling
Effective resource Extend life of
utilisation – better desired
campaign ROIs subscribers
Quick response
to market
Manage internal reviews with little ‘sweat’ – Makes you an internal Champion
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