Yaron Assabi
yaron@dsg.co.za
Why is Mobile the most important customer
channel in Africa ?

Hidden
Agenda
ü Mobile has the highest
reach and is the most
rich channel for
customer insight
ü Low cost service
channel
ü Enhanced security for
Banking
ü Personalisation
ü Mobile Loyalty

Banking Evolution
“ Banking is not some place you go, banking is
something you do! “ ~ Brett King, author Bank 2.0
The future of banking will be almost entirely about mobility , as mobile devices
are the most pervasive medium in Africa .

ü Social , Local & Mobile convergence is poised to create a truly original and
markedly customer-driven banking experience.
ü The commoditization of products within the industry is making it very difficult
to compete on price.
ü New entrants such as Google and PayPal are experienced in building
online relationships and are used to developing and marketing transparent
products.
ü In order to compete Banks need to engage the customer and create
Loyalty based on customer insight and personalisation, which make
mobile the most rich & cost effective channel of choice

PayPal’s New App – Pay with your face
Source : eNCA www.youtube.com
http://www.youtube.com/watch?v=5NHrDlNnR6U

Simple Value Chain
Complex Value Chain
FinancialInstitution
TelecomOperator
Convergence of the South
African mobile transactional
space is very evident, with
players from both sides of the
spectrum converging to
compete for ownership of
mobile customers for
transactional services
The potential threat for financial
services companies in terms of
being disintermediated in the micro
to medium transactional space has
however become very evident, with
mobile networks increasingly
expanding their footprint outside of
the mobile space, offering
• Airtime sales
• Short term insurance
• Mobile payment services and
• Micro payments
A large degree of mobile banking usage is centered around
airtime purchase and transfer. An increasing use of digital
channels amongst mobile telecommunications operators
implies a direct threat to Banks digital channel strategy &
customer ownership becomes increasingly more
important.
Telecom & Financial Services Overlaps & Trends

Airtime
Purchases
74%
Payments
15%
Other
11%
The single most popular
transactional service in cellphone
banking remains airtime purchases,
with 74% of customers using it for
this purpose, and only 15% paying
accounts via their phones.
Airtime purchases dominate the use of mobile banking
applications, followed by airtime transfer,
Rural users (69%) Urban users (51%)
Mobile purchases of Prepaid Electricity
Rural Users (33%) Urban users (21%)
Money Transfer
Rural users (44%) Urban users (34%)
Prepaid vs Contract usage
Rural Users (94%) Urban Users (80%)
Average mobile spend across SA population*
Prepaid (R165) Postpaid (R387)
Internet Access across South Africa
• 59% of South Africans have Internet access,
• 5% access it on a PC only,
• 27% on a mobile phone,
• 27% has access to the Internet through a combination of mobile and
PC.
• Only 13% of rural areas have Internet access on a PC,
• 61% of rural areas that have Internet access on a mobile phone.
Source: Arthur Goldstuck, World Wide Worx, Mobility 2012 research study
* These figures are across the South African mobile consumer base and therefore
indicative only.
Airtime Purchases dominate mobile banking

Added by Craig Wilson on 20 May 2013.
Saved under In-depth, Top
Tags: Beyond Payments, DStv, GSM Association, GSMA, Herman
Singh, MultiChoice, ODM, On Digital Media, Shameel Joosub,
Standard Bank, TopTV, Vodacom
TweetTweet
5 2
Shameel Joosub
Vodacom expects demand for data to offset a decline in voice revenues in the next few years, but
with the margins on data slimmer and the price of data being driven down by a competitive
market, the operator is also hoping so-called “over-the-top” services — content, social
networking and financial services are three examples — preserve margins and ensure demand
for data continues to grow.
In South Africa, total data traffic on Vodacom’s network has increased 40% year on year,
according to group CEO Shameel Joosub, with average monthly data usage per smartphone user
now at 139MB. Joosub says data growth will offset revenue declines and the operator “should be
able to continue to expanding margins”.
“Data doesn’t dilute margins in any way. Our margins are still expanding slightly in South
Africa,” he says. Almost a third of group service revenue (that is, revenue from subscribers using
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Vodacom expects demand for data to offset a decline in voice revenues in the next few years, but
with the margins on data slimmer and the price of data being driven down by a competitive market,
the operator is also hoping so-called "over-the-top" services - content, social networking and
financial services are three examples - preserve margins and ensure demand for data continues to
grow.”
~Shameel Joosub, CEO Vodacom
* MFS – Mobile Financial Services – TechCentral Article, 20 May 2013
Recent Statement from Vodacom re: MFS

Hypothesis vs. Agenda"

CUSTOMERS x USAGE x TENURE
SALES ACQUISITION COST + COST TO SERVE
SUCCESS FORMULA =
How many
customers would
you acquire?
How much do
they spend with
Bank?
How long will
they stay with
Bank ?
What does it cost
to acquire a new
customer?
What does it cost
to serve a
customer?
!
Unique CVP based on Customer Segmentation

INCLUSIVE
PERSONAL
BUSINESS
MIGRATE
CUSTOMERS TO
DIGITAL
CHANNELS
Competitive
Offerings
Target
Market
Needs &
Wants
Ease of
Implementation
in each
segment
Cost of
Implementation
in each
segment
Organizational
Constraints
within each
segment
Strategic
Importance in
each segment
Market
Trends
SBSA
SWOT
Traditional
Mobile
Behavior
!
Unique CVP based on Customer Segmentation

Posteitaliane, the Italian postal service, launched the Poste mobile service in Nov 2007
on the Vodafone network and has grown into the biggest MVNO in Italy with over
50% of the MVNO market share
Source: Nereo Financial Institutions & MVNOs Analysis Document, 2010
Posteitaliane MVNO Case Study

Postemobile charges users transaction fees on the MFS
operations thereby increasing its customer wallet-share.
Source: Nereo Financial Institutions & MVNOs Analysis Document, 2010
Posteitaliane Integrated core banking & mobile
proposition =Posetmobile

ü Ownership of the customer brand relationship is an imperative to drive single-account
and single SIM usage
ü Control over the customer experience has a direct bearing on the above, as it drives
not only the customer perception but adoption of technologies and indirectly
acquisition
ü Ownership of the customer base is equally important, as the cost of acquisition & cost
to serve is an investment into an asset traditionally handed over to other parties
ü Proposition differentiation drives the consumer perception and acquisition/usage. The
Digital Channel proposition therefore directly affects the overall brand perception
ü Operational (& technical) flexibility in a rapidly changing industry is important to ensure
the maintainence of differentiated position, as well as to accommodate existing
initiatives within the bank
ü Commercial Model flexibility informs both differentiation capability and profitability
overall
ü Investment Requirement is important ultimately as it may restrict future agility.
ü Dependency on network relationship is self explanatory, as networks will become
direct competitors in terms of digital channel functionality and core products and
services.
CEM Critical Success Factors in a
blurred environment

ü Banking + loyalty into a SIM card to keep
relationship with your customers beyond the
traditional banking / loyalty card.
ü A personalized menu to drive use of brand
content
ü An opportunity to push personalized
smartMessage
Mobile
apps
Bank
Points
Insurance
Get Closer to your customers through a branded
SIM Card and /or SmartPhone
Source : Gemalto Smart Message

The Next Big Thing in Mobile
Source : Business Insider

T –Commerce –Multiple Screens
Source : eConsultancy

Source: http://econsultancy.com/uk/reports/the-progression-of-agency-value
Bigger
idea
Simple
idea
Big
idea
Keep these front
of mind
Progression of agency value

Mobile Plays a key role in every step of
path to purchase

NPR slide"
UI & UX Critical to the Customer path to purchase

Personalized messaging & menu
options, relating to the
subscriber
package and
profile.
Live Chat with
Customer
Care.View Usage
for the
month.
Access
ODP Apps
& Content.
Recharge using
Credit/
Debit Card
with PIN
Manage
Your Phone/
Bank
Customer Experience- ODP / Self Care

ü Mobile meeting &
services directory
ü Video chat on the go &
webinars on financial
products & services
ü Cutting edge video
collaboration
experience from your
mobile device
Mobile Video Chat with your Personal Banker "

Mobile
Marke0ng
Mobile
Customer
Service
Know
your
customers
Know
their
problems
Proac5ve
help
where
needed
Know
your
customers
Know
their
preferences
Give
them
more
of
what
they
want
Real-­‐5me
knowledge
Targeted
adver5sing
Enhanced
brand
loyalty
Business Value

ü It is now recognised by the industry and brands that a large portion of
the marketing budget ( 25-50% ) should be spent on mobile.
ü We forecast that in Africa over the next few years the majority of
marketing spend will migrate to mobile as brands recognise the
effectiveness and ROI .
ü Mobile advertsing is seen by brands as a way to make products and
services more affordable for low ARPU customers ( “Freemium
Model“), and a way to retain them longer .
ü “More value for money for the attention span”
Mobile Advertising

Mobile Web Browsing Incentive Plan
Pay as You go Mobile Internet
¥ Attract new data users with time-based access
¥ Offer “no commitment” trials
¥ Promote new ways to access content
Launch Pad for new services
¥ Promote new services without big media
campaigns
¥ Offer services based on triggers such as URL,
content type, user profile, and others
Targeted Mobile Advertising
¥ Use sign-up pages for advertising:
“This service is brought to you by Cape Times”
¥ Offer discounts for services in exchange for
advertising
!
!

MY CREDIT
Bad debt Demographics
Average
balance
MY
PERSONAL
DATA
MY STUFFMY IDENTIFIERS
MY
INTERACTIONS
MY
RELATIONSHIPS
MY CONTEXT
MY DEVICES
Name
Address Gender
Profile
Preferences
SIM SoftSIM
Serial NumberDevice details
Number SIP Number
IP Address
Location Presence
On/OffRoaming
Pictures Videos
CalendarAddress Book
Bank School
Friends
Workplace
Browsing History
.mobi domains QR Codes
A wealth of untapped data for
Personalisation

PERFORMANCE
GUARANTEE…
DIFFICULTIES OF REACH CAPACITY IN A COMPLEX
ENVIRONMENT
TARGETING CAPACITY…
Variety of handsets…
…operating systems … …and stakeholders
Getting the right message to the right
person.
Ensuring a real Return On
Investment
• Uncertain ROI for
many campaigns.
• No clearly defined
metrics.
!
A Complex Environment
Source : Gemalto

2
Joint venture between the
UK’s three largest mobile
network operators
68.5 million mobile
subscribers
IGLOO
'These guys [Weve] have more data than anyone could ever imagine, (and) there's
now going to be segmentation by location at scale,' says James Connelly,
managing director of mobile marketing agency Fetch. 'No one has really cracked
location very well for that reason - the scale has always been difficult. This
will be the first time you can really do it.‘
Marketing Magazine - Feb 2013
WEVE Case Study – We Locate

30
Digital Card – Your Green Loyalty Solution

Mobile
Loyalty
Digital
card
issuing
and
management
One-­‐to-­‐one
messaging
Partner
and
coali5on
programs
A
n
a
l
y
t
i
c
s
Mobile
Offers
Issuing
&
Distribu5on
Acceptance
&
Redemp5on
Clearing
&
Repor5ng
Mobile
Payments
Branded
Closed
Loop
Card
Integrated
Online
Account
NFC
Card
Provisioning
31
A Unified & Integrated Experience

32
ü Create secure loyalty cards (pin code required)
ü Identify a customer, with barcode (13 types supported) or QR
code
ü Define your company’s contact details (website, e-mail, phone
number, store locator etc.); these become available with the
digital card information
ü Manage all card data including regular balance and status
updates
ü Viral distribution (invite a friend) directly from contacts on the
mobile
ü Promote your program on social networks (Facebook and
Twitter) providing rewards to customers for posting feedback
ü Communicate: broadcast or personalise information, text and
image based
ü Add augmented reality to separate your brand from the rest
ü Incorporate your Social Responsibility
ü Mobile Device Management vs Lost card
ü NFC payments
as part of the platform
Loyalty Platform Configuration

Proximity Marketing
using mobile for real-
world interaction

34 | Touchatag |August 2009
Use phone camera to scan image and see discounts

Viral Distribution
Content
Platform
01.
Create a viral
content
repository
02.
Launch the
Viral Effect
opinion leaders"

ü Rewards related to specific forward events:
ü Aspirational instant win with “off line” prizes
ü Certain rewarding / Digital gadgets
ü “Viral” Contest: “most wanted content”
ü Prize-draws for the most-active users (Top FWD users)
ü Prize giving for “shortlisted content” authors (UGC)
ISTANT WIN: forward it to 3
friends and find out if you have
won an official World Cup football
CERTAIN REWARD: Forward the
ring-tone to 5 friends and you’ll receive
an exclusive full track version
UGC CONTENTS: upload and
forward new viral contents. Enter
in the top10 and you win !
FWD USERS: the more you
forward, the more chances you
have of winning the new prize car
Key Motive = Reward

They don’t leave because
there’s a compelling reason to
leave.
They leave because there’s no
compelling reason to stay
Why customers leave?

ü By simplifying traditional
practices by applying the best of
today’s technologies
ü And pioneering the design and
implementation of the next
generation of technology &
Marketing concepts
ü DSG has set a new level of
expectations for innovative
consumer brands.
DSG Powers Return on Marketing Innovation

ü Mobile is entering an area where it can deliver
experiences and branding – an emotional medium at last
ü Mobile is the most relevant , cost effective channel with
the highest reach and most richness in Africa
ü It isn’t about mobile as a ‘channel’ but about the
customer journey/experience and the roles mobile best
plays in making that as easy, useful, relevant and
enjoyable as possible
Some parting thoughts….

Yaron Assabi
yaron@dsg.co.za
www.dsg.co.za
yaronassabi
www.youtube.com/dsg247
www.facebook.com/dsglimited