Presented during the High Performance Marketing Conference 2012, organized by Accenture on February 9th 2012. This presentation was given by Andreas West of Celcom, and looks at how Celcom uses analytics for excellent customer lifecycle management.

1. High Performance Marketing
Conference 2012
Using Analytics
for Excellent
Customer Lifecycle Management
Andreas West
Senior Vice President - Customer Value Management
Celcom Malaysia
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2. High Performance Marketing
Conference 2012
Customer Lifecycle Management (CLM) is to drive profitability earlier in the lifecycle, increase the margin
of customers as they mature and extend the tenure of profitable customers
Customer Lifecycle Join Use Request Support Reconsider
Terminate /
Discover Sign-Up Activate Use Service Bill & Pay Make Contact Resolve Issue Revaluate
Extend
CLM Actions to Drive Greater Lifetime Value 5. Extend Revenue
through Proactive
3. Intervene to Up-Sell / Retention Treatments
Cross-Sell and Drive
Revenue
With
4. Intervene to Minimize
CLM
number of Unprofitable
2. Intervene to reduce Customers
Costs-to-Serve and Drive
Downward
Margin
Profitability
Migration
Range of
Customer
1. Make customers profitable Profitability
faster through Targeted Scenarios -
Acquisition and Full Service Take- Without CLM
Up
6. Life-stage and profile based treatments to match customers needs and increase loyalty
Customer Lifetime
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3. High Performance Marketing
Conference 2012
Customer Lifecycle Management shifts the focus from “To Whom can I sell this ?” to “What is relevant to
You ?”
Traditional Marketing
“I have an offer …” “…let me find the best group of people
to tell about it.”
Traditional Batch
Campaign
CLM Marketing
“I have a customer …” “… let me find the best relevant treatment for this customer at
the moments and channel he prefers.”
Event Based
Campaign
(…)
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4. High Performance Marketing
Conference 2012
Understand customers’ behaviour is the fundamental of Customer Lifecycle Management
Customer Segmentation
High
CS05 – Loyal Old Folks
CS04 – East Malaysian
• Mid Revenue Loss
Chinese Churners
per month
• High Revenue Loss
• Age 58 to 108
per month
• Northern, Malay
• Old Price Plan CS01
• Low SMS
• No Call Bar
ARPU (RM)
CS02
CS04 CS06 – High Value 1+5
CS03 • Low Revenue Loss
per month
CS05 • Malay Tenure (Months)
CS06
• LOS 3 to 29 months
CS07 • Child Account
• Call Barred > 3
Low
(Bubble Size = Segment Count)
New joiner Loyalist
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5. High Performance Marketing
Conference 2012
In addition to behaviour, customers’ needs drive the design of customer lifecycle management
The World In My Hands
Playing Pushing the
Discipline boundaries
around
Time out Pleasure
from the world Bonding Seeking
Maintaining Pimping
Unleashing
Continuous Thrill of the New
Connection Routines
Rewarding Exploring
Holding on Life
management
Being in the
loop
Acceptance Driving
Availability Keeping up
change
Source: HuNeedsTM model, mext System & Strategies 5

6. High Performance Marketing
Conference 2012
Based on customers’ needs, five telecommunication market types are derived
The World In My Hands
Playing Pushing the
Control & Bonding Discipline boundaries Power Players
around
Time out Pleasure
from the world Bonding Seeking
Maintaining Pimping
Unleashing
Continuous Thrill of the New
Connection Routines
Rewarding Exploring Progress
Managers
Keeping Up
Holding on Life
management
Being in the
loop
Socialites
Acceptance Driving
Availability Keeping up
change
Source: HuNeedsTM model, mext System & Strategies 6

7. High Performance Marketing
Conference 2012
A/B Testing
What is A/B testing?
Benefits:
• Samples from 2 or more customer-group are given the same offer • Provides data-based insights
• A metric defines success • Non-differentiable by customers
• The group exhibiting more success is selected for real-world use • Low risk & cheaper test approach
Examples
1. Putting human photos on a website increased 2. Adding “It’s free” increased the clicks on the sign-up
conversion rates by as much as double button by -%
3. Simply changing the color of the sign-up button
from green to red increased conversion rate by -%
Source: The Ultimate Guide To A/B Testing, Smashing Magazine
http://www.smashingmagazine.com/2010/06/24/the-ultimate-guide-to-a-b-testing/ 7

8. High Performance Marketing
Conference 2012
Intelligence gained out of A/B testing campaigns was built into future campaigns to generate higher
response rates
March’10 Bonus Campaign – Reload & Use RM -
Campaign Mechanics: Response in the two phases was studied:
• Reload and use RM- – Get -% bonus on next reload • ARPU < - – The campaign has positive impact
• ARPU - - - – The campaign is not effective
Take Up Rate by ARPU bands
Campaign Take Up Control Group Take Up
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9. High Performance Marketing
Conference 2012
Intelligence gained out of A/B testing campaigns was built into future campaigns to generate higher
response rates
Test Campaign on Chinese Subs
• Daily, 888th customer to reload RM30 to win Ang Pow
(Jackpot) worth RM888
• Promotion around Chinese New Year
• SMS broadcast in English & Chinese
Take Up Rate by SMS Language
English Chinese
SMS Text Language
Target Base Take up Take Up Rate
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10. High Performance Marketing
Conference 2012
Traditional loyalty program, given all customers via ATL, impose high financial burden to Telco operators,
with low ability to address churn
Incremental Value (Losses) From Loyalty Program
Phone Only
Redemption
(RM’000 000)
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11. High Performance Marketing
Conference 2012
Predictive modeling improves the accuracy of target identification, thus reducing the wastage of
campaign funds
The scoring model correctly identified -% of As a result, the scoring model reduces
churners versus only -% without model campaign funds wastage by -%
Model Effectiveness on Identifying Churn Model Effectiveness on Reducing Wastage
Count
(RM ‘000)
Wastage (With Wastage (Without Savings
Model) Model)
Churners With Model Without Model
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12. High Performance Marketing
Conference 2012
Offer matrix is used to optimize customer’s investment based on both their historical lifetime value. This
allows us to invest more money in ‘good’ high-value long-tenured customers and reduce investment in
‘bad’ low-value high churn risk customers.
Value Segments combining E.g. Postpaid High-Risk Offer Matrix Tenure bands
value & behavior
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13. High Performance Marketing
Conference 2012
The mobile operators top the rank of Ad Spend in Malaysia, but…
Rank Top 10 Adspend by Brand Feb’11 (RM’000)
(Ranked by Feb’11)
1 Celcom -
2 KFC -
3 McDonald’s -
4 Maxis -
5 Maybank -
6 Digi -
7 Canon -
8 Wall’s -
9 Sunsilk -
10 TM -
Source: Nielsen Advertising Information Services (AIS)
http://www.aaaa.org.my/resources/2011resources_002.html 13

14. High Performance Marketing
Conference 2012
This advertising arms race have proven to be a zero sum game; market shares by revenue and profit have
remained stagnant
Market Share by Revenue (RM) Market Share by EBITDA (RM)
Market Share (%)
Market Share (%)
2007 2008 2009 2010 2007 2008 2009 2010
Maxis Celcom Digi
Source: Ovum 14

15. High Performance Marketing
Conference 2012
This is caused by the fragmentation in the media as the channels exploded in the recent years
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16. High Performance Marketing
Conference 2012
This is further hampered by the market saturation and declining ARPUs
Malaysia Mobile Penetration Rate and Industry ARPU
Mobile Penetration Rate (%)
Mobile Industry ARPU (RM)
2008 2009 2010 2011 2012 2013 2014 2015
No of Mobile Phone Subscribers/100 Inhabitants Mobile Industry ARPU
Source: Business Monitor International Malaysia Telecommunications Report Q2 2010 16

17. High Performance Marketing
Conference 2012
Mobile operators tried to mitigate the impact of declining ARPUs through increased acquisitions, only to
find falling growth rates
Growth of Prepaid/Postpaid Connections
Connections (‘000)
Growth(%)
2009 2010 2011 2012 2013 2014 2015
Prepaid Connections Postpaid Connections Connection Growth
Source: Ovum 17

18. High Performance Marketing
Conference 2012
Consumers trust their friends & relatives the most, out of all the available channels and information
sources
Source: Nielsen Trust and Advertising Global Report July09
http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/07/trustinadvertising0709.pdf 18

19. High Performance Marketing
Conference 2012
Social network is used to drive the adoption of iPhone in a large Norwegian mobile operator
Figure 2. Time evolution of the iPhone adoption network
The data showed that -% of the iPhone users communicated
with at least one other iPhone user, which speaks of the social
nature of technology consumption.
Figure 1. iPhone Q4 2007 adoption
network
Source: Product adoption networks and their growth in a large mobile phone network, IEEE ASONAM 2010
http://www.sundsoy.com/asonam_product_spreading.pdf 19

20. High Performance Marketing
Conference 2012
Executive Summary
1. Use Customer-Segmentation to identify their needs
(Customer Centric vs. Product Centric Marketing)
2. Test, Test, Test !!!
Do lots of A/B testing to refine your campaigns, offers, channels, language etc.
3. Use Analytics to optimize your investment
4. ATL vs. BTL - Traditional vs. New Market Model
(There is need for analytical CMOs)
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21. High Performance Marketing
Conference 2012
What does it look like in the future
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22. High Performance Marketing
Conference 2012
Q&A
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23. High Performance Marketing
Conference 2012
Andreas West
SVP Customer Management
Celcom Axiata Berhad
Email: andreas.west@celcom.com.my
Twitter: A4XRBJ1
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