mobile operators: selecting the right mobile marketing technology

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Transforming Mobile Marketing™

Mobile Operators: Selecting the right Mobile Marketing Technology A choice for long term strategic growth December 2009

Mobile Operators: Selecting the right Mobile Marketing Technology

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Contents

Executive Summary ................................................................................................................................. 3

Incremental Revenue Opportunities with Mobile Marketing ................................................................ 4

Challenges in Mobile Marketing ......................................................................................................... 5

Mobile Marketing Technology Evaluation Framework ........................................................................... 6

CXO View - Impact of Mobile Marketing Technology ......................................................................... 6

Customer Experience ...................................................................................................................... 7

Revenue Realisation: Incremental Revenue and New Revenue streams ....................................... 8

Low Total cost of Ownership .......................................................................................................... 9

Business Users/Marketers View - Higher Marketing Agility ............................................................. 10

IT View - Implementation Experience and Ease of Deployment ...................................................... 11

Summary ............................................................................................................................................... 13



Executive Summary

Mobile marketing and advertising offer operators potential opportunities to generate incremental revenue and reduce customer churn. As operators change their marketing strategy from customer acquisition to subscriber value maximisation, they focus on establishing a mutually rewarding relationship with subscribers. Mobile presents a unique channel for marketers to engage subscribers in a direct and real-time conversation. However, along with opportunities, mobile channel poses several challenges.

Understanding the unique challenges of mobile as a marketing channel and deploying the right technology platform is a critical step towards successful mobile marketing.

In the first section, this paper briefly looks at mobile marketing opportunities and some of the challenges an operator faces while planning and implementing mobile marketing strategies. Foremost challenge is the unavailability of appropriate technology tools.

Mobile marketing technology has matured over the years from first generation engineering tools designed for message blasting using spreadsheets. Later second generation tools emerged which were mostly bolt-on to BI and CRM systems with limited offline analysis and targeting features, designed for long cycle campaigns like email. Currently, more sophisticated third generation technology tools are available in the market place, which are specially designed for the mobile channel.

The second section of this paper introduces a technology evaluation framework which is intended to serve as a reference for operators to choose between different technology tools. Framework is designed to address concerns of all the key stakeholders of a mobile marketing technology deployment project – CXOs; business users and marketers; as well as IT and network teams. It is proposed around three angles – short and long term impact of technology; usability and scalability for marketers as well as ease of deployment and implementation.

Each of the technology evaluation angles is explained in depth in subsequent sections. This paper covers key design considerations for operators – both technical and functional which will help them in choosing the right technology.



Incremental Revenue Opportunities with Mobile Marketing

Reaching the right customers with the right offers at the right time is the key to an operator’s success in today’s competitive world

Most of the mobile markets across the globe have already hit the maturity point, and other markets are growing at a rapid pace. Even emerging markets like India and China are showing signs of saturation. Operators are now changing their game plan from customer acquisition to value maximisation. After an era of price wars, operators are now looking at more creative and innovative marketing strategies.

Operators realise that along with retaining customers, it is also equally important to have a higher share of their wallet to sustain growth.

Mobile marketing, if done effectively, can create incremental revenue from existing subscribers.

1. Higher recharge revenue by encouraging subscribers to top up more frequently and maintain higher average balances.

2. Higher usage revenue through contextual up-selling and cross-selling and usage-based incentive programmes targeting low usage subscribers.

3. Lesser churn through loyalty offers and timely incentives to those subscribers exhibiting tendency to churn

4. Additional revenue through launching and promoting new products and services including third party advertisements based on subscribers’ profile and interests.

Mobile: Unique marketing channel for operators

Directly connects marketers to subscribers

100% reach to all subscribers, especially to prepaid segment

Millions of subscriber touch points for product promotions and selling

Can track customer usage and actions in real-time

Enables instant response to customer needs and feedback

Can run relevant up-sell and cross sell campaigns to increase customer spend

Can measure the success of campaigns within minutes



Challenges in Mobile Marketing

The foremost challenge that seems to limit the scope of mobile marketing for operators is the lack of adequate technology tools. It is important to understand the challenges faced by mobile marketers before we start looking for the right technology tool. Let us look at them briefly.

1. Current marketing technology is too slow

Most of the technologies used by operators today are designed for slow channels like e-mail or call centres where in the responses are not expected in real-time. With such technologies, marketing a broad range of products to millions of subscribers in a short time is impossible. The lifecycle of new products and services is extremely short, mostly driven by popular trends. Instant selling of such products is impossible with a slow technology.

2. Subscriber value maximisation needs a direct marketing channel

Engaging subscribers is an ongoing process. Only a technology that enables direct and instant conversation between marketers and subscribers can sustain a mutually rewarding relationship. Current technologies designed for push and forget tactics cannot enable real-time customer engagement.

3. True ROI measurement is impractical and too slow

To have full accountability over every marketing campaign, marketers should have a true measure of ROI. Measuring the success of campaigns purely based on responses is not always correct. Marketers need technology tools that can measure and report ROI accurately within minutes of sending out a campaign.

4. Unscalable marketing approach for VAS Revenues

With stagnating voice and data revenue, percentage of value-added services (VAS) in total service revenue is increasing steadily. As a result, the number of partners also increases and the question arises “Who should do the marketing for those joint ventures?” Partners don’t have access to the entire subscriber profile, and mobile operators cannot directly support the marketing of partners’ products. To leverage these new revenue opportunities, operators need a marketing technology that allows their partners to focus on effective marketing, while they exercise control over subscriber data and marketing policies.

5. Lack of real-time data for personalisation and dynamic Offers

Currently, marketers do not have access to real-time data sources. Operator’s BI and CRM systems have a latency of minimum 24-48 hours. By the time the data is transferred and analysed, it would have lost its real-time value. Relevant offers for the mobile channel require an operational real-time mobile marketing database which provides fresh subscriber data to marketers all the time.

6. Marketers are consumed with Manual Data Processing

Currently, mobile marketers depend on manual processes to execute campaigns. Data files are being manually transferred, analysed, exported, transferred again and uploaded for sending and the story continues. This process is error-prone, slow, hardly scalable and above all, hinders marketers from being innovative and creative.

7. Personalised offers cannot be tracked and rewarded:

Offers like “Top-up with a minimum of $50 and get $20 extra talk-time” targeted, for example by subscribers’ ARPU are proven to have high ROI. But the challenge is to identify conversions for an offer, based on the eligibility criteria and fulfilling the reward to the customer. With tens of campaigns per day, it is impossible to keep track of them manually.

8. Subscriber churn propensity can’t be tracked and treated in real-time:

It is important for marketers to track customer usage in real-time and detect any possibility of churn. For example, when a subscriber’s usage dips below a threshold limit, marketers should be alerted automatically to act and send a suitable offer to encourage customers to increase usage. So it is important to detect churn propensity real-time, and act on it proactively.

9. Limited reach to rural populations

Rural areas in countries like India have a rapidly growing subscriber base and mobile is the only channel to reach them. However, barriers such as multiple languages and low literacy rate make it difficult for marketers to address the rural population. It requires a marketing technology that allows for automatic language personalisation and the use of the voice channel for those who cannot read.

10. Subscriber privacy enforcement can’t be automated

Increased competition, subscriber fatigue and government regulations make subscriber privacy, Do Not Contact (DNC) list and frequency management important aspects of mobile marketing. Most operators have some policies in place, but they have no adequate tools to enforce them. They run a high risk of violation of regulations as a result of this. An automatically enforced solution is required to control the frequency of messages and manage privacy policies.

11. Marketing inventory is not fully exploited

Mobile operators have successfully exploited push channels using generic multi-purpose tools. However, the interactive and real-time potentials of mobile are yet to be unlocked. Though the operators realise the opportunity, they are hesitant, as real-time marketing involves a lot of practical difficulties. To monetise valuable subscriber touch-points, it requires an integrated technology that will help in rolling out real-time offers based on subscriber actions.



Mobile Marketing Technology Evaluation Framework

Talk of selecting any technology, especially the one, which directly impacts millions of subscribers, operators need to be very cautious in making the choice. As we saw in the first wave of mobile marketing, improper technology tools can potentially cause customer dissatisfaction.

Let us now see the key stakeholders involved in a typical mobile marketing technology selection process. Though marketing teams are primary users of this technology, usually IT and network teams have to get involved in the deployment. Most of the data a marketer needs is scattered across disparate systems owned by the IT team. Similarly, the network team is also involved, as marketing campaigns need to be transmitted through network elements like SMSCs. Mobile marketing, as we have seen in the earlier section, is not just an operational system. It is rather seen as a strategic tool for revenue growth and customer retention. Hence a buy-in from the top management is essential. Therefore, mobile marketing technology needs to be evaluated from the following 3 dimensions:

CXO/Top Management View - Short and long-term Impact of the technology Does this technology enrich customer experience? What impact will this technology have on top line? Can this technology reduce total marketing costs?

Marketer’s/Business Users View – Agility in marketing processes Can a marketer without IT skills design, execute and fulfil a campaign in 15 minutes? Can the system expose marketing inventory to partners and advertisers? How scalable is the technology to leverage large volume of subscriber data across multiple

systems and locations? Can it provide marketers with real-time subscriber intelligence for targeting? Can the marketer control all steps of the closed marketing loop in real time in a single interface? Does the Marketer have real-time visibility to the ROI of all campaigns? Can it help marketers to serve contextual offers and fulfill them in real-time?

IT & Systems View - Implementation experience and ease of deployment Does the vendor possess deployment expertise when it comes to large mobile operator

environments? Can this platform address all mobile marketing needs? How easy is it to integrate this technology into existing infrastructure? How easy is the maintenance of the system, post-deployment? Can it manage marketing inventory and campaign traffic?



CXO View - Impact of Mobile Marketing Technology

Choice of right mobile marketing methodology and enabling technology is no longer an operational one, but a strategic decision that could have short and long term impact.

CXOs of mobile operators need to choose a technology considering the impacts it could make to their operations, business and strategic growth. They have to base their decision looking at the immediate as well as long run impact of technology.

The Top Management generally has three key directions, where it assesses the impact:

Customer Experience

In today’s highly competitive telecom markets where an unsatisfied customer has different options to choose from, understanding their needs and preferences is extremely important. Retaining customers means catering to their unique needs in a responsive and timely manner.

“A 5-per cent improvement in customer retention rates can yield as much as a 75-per cent increase in profits for companies across a wide range of industries.” – Bain and Company

Customer needs and preferences vary depending on each stage of their lifecycle and operators should identify them, advise them on right products and services and thereby become a one-stop shop for all their needs. This way, operators can proactively manage the relationship by influencing customer usage behaviour and preferences at every lifecycle stage.

Significance of Mobile Marketing Technology

Some of the key issues, which need to be addressed in this context, are:

Churn management: Subscriber usage behaviour variations like drop in MOU have to be monitored to predict churn tendency. When the variation crosses a threshold, it should automatically alert marketers and send suitable offers or incentives to encourage subscribers to use services more, and thus manage customer churn proactively.

Impact Immediate Long run

Customer Experience Retention and Satisfaction Customer ownership

Revenue Incremental revenue New revenue opportunities

Cost Savings Automate the process Easy maintenance and upgrades



Offer management and fulfilment: Operators often have large product portfolio that extends to 100s, and these are characterised by extremely short lifecycles. Real-time promotion is the key. The right offer should be sent to the right customer at the right time. Offer management process gets completed only if operators track customer acceptance and automatically fulfil them.

Permission-based marketing: Intrusive marketing can irritate customers, eroding the value of mobile marketing over a period of time. Mobile marketing technology should help operators enforce policies and guidelines automatically to ensure that marketing is done strictly in compliance with customer preferences and regulatory norms like DND lists.

Lifecycle marketing: Mobile marketing platform needs to help operators manage customer relationships at every stage of the lifecycle. It should closely monitor customer usage behaviour and identify their preferences and needs. The marketer has to adopt a different approach for each lifecycle stage, as subscriber requirements in each stage can be different.

Loyalty Management: Every subscriber should be rewarded with appropriate incentives for

being loyal and spending their wallet share. These loyalty initiatives should encourage them to move to the next level in total spending. Mobile marketing technology should help in designing and administering loyalty campaigns as well as track net impact of such programs on churn rate and ARPU increase.

Revenue Realisation: Incremental Revenue and New Revenue streams

Operators would like to add incremental revenue leveraging their current assets and investments in short-term. Current assets of operators are subscriber base and mobile media. As seen in the diagram below, mobile marketing technology should look at generating incremental revenue by helping operators create higher impact campaigns. Impact of campaigns could be higher if they can be

Targeted at the right customer segment/customer

Contextual, means sending right offer at the right time

Iteratively improved

Scaled up for maximum reach and volume

In the long run, once operators prove the value of mobile media by advertising their own products, they have a bigger potential in convincing brand houses or advertising agencies leverage this inventory for third party advertising. It unlocks a new revenue stream for operators.



Operators should be able to run a wider array of high impact campaigns targeted at generating additional revenue from existing subscribers as shown in the diagram below.

Recharge marketing: Target subscribers having lower balances and send offers to encourage them to top up more frequently and maintain higher balances.

Usage marketing: Next step is to encourage subscribers to spend more not just by promoting new tariff plans and product subscription packages, but also by giving other incentives to use existing services more frequently. Mobile marketing technology should track subscriber usage in real-time and trigger appropriate marketing action to increase usage and spend with relevant up-sell and cross-sell offers.

Loyalty & Churn management: Launch loyalty programs to retain high value customers giving them special incentives and rewards for being loyal and spending higher wallet share. Prevent churn with timely incentives to encourage subscribers to stay with the operators and use their services more.

Advertising: Operators can add a new revenue stream if they can let third parties like brand houses or advertising agencies use subscriber touch points over their network to push their promotions. There is a huge volume of mobile impression available with the operator along with subscriber data. Mobile marketing technology platform should help operators utilise this huge volume of impressions and prove its value to third party advertisers.

Low Total cost of Ownership

Fully automated: Resource intensive applications increase total cost of ownership. Maintenance of such systems is cumbersome too. Mobile marketing platform should completely automate the workflow and replace time consuming and error-prone manual processes.

Fully integrated: An operator’s environment has multiple marketing teams responsible for promoting different product lines. A mobile marketing platform should have end-to-end functionality to manage diverse business requirements of different marketing teams and reduce TCO by saving resources and effort in managing multiple systems.



Fully managed: A mobile operator usually has a large IT infrastructure with hundreds of systems. A mobile marketing platform may have to integrate with multiple data sources and messaging systems. An ideal platform should have an open architecture to make integration easy and scalable.

Business Users/Marketers View - Higher Marketing Agility

For a mobile marketer, agility is important for creating high volume and high impact campaigns. He has to promote hundreds of products, some of them with extremely short life cycles to millions of subscribers scattered across different regions. As such, the expectation is to have a real-time platform which will help marketers track customer usage and respond quickly to subscriber needs while reducing the overall time, effort and cost involved in designing and launching campaigns.

Total control and visibility: Marketers should have full control and visibility over marketing workflow at any given point in time. They should have a one-point web interface to plan, execute and control closed loop campaigns.

Marketers’ View – Increased Marketing Agility

Characteristic Importance

Total control & visibility Full control and visibility to 100’s of campaigns at one point

Agility Platform to enable closed loop mobile campaign in minutes

Usability

Simple to use platform for non-technical marketers

Scalable

System to support millions of users, billions of events and 100’s of partners

Full functionality

All marketing workflow and applications in one platform

Real-time

Real-time platform to enable contextual and event triggered marketing

Campaign ROI

Accurate measurement of net monetary impact of each campaign

Iterative improvement Marketers to test ideas with instant campaigns

Inventory Management Optimally allocate marketing inventory to marketers and advertisers



Agility: A real-time fully integrated platform can empower marketer with optimum agility to do a closed loop mobile campaign in minutes.

Usability: A technology designed for marketers should be simple and easy to use with guided UI and point and click tabs. This would reduce their dependency on IT teams and turnaround time on launching campaigns and fulfilling offers.

Scalability: A typical mobile operator’s environment is characterised by millions of users and billions of events. To be able to support such huge volumes, the architecture should be carrier class. A good mobile marketing technology should support distributed users with a centralized control.

Full functionality: Mobile marketing technology should integrate all functionalities a marketer needs for managing campaigns, end to end.

Data integration – consolidate profile and usage data from multiple data sources to create a 360 degree view of customer

Closed loop marketing workflow – one interface for targeting, executing, tracking, analysing, reward fulfilment

Integration with communication gateway- real-time integration with different network elements like SMSCs

Real-time: The context of a subscriber in a mobile operator’s environment changes dynamically. For example, it would be of no use to promote a subscription package worth $30 to a subscriber with pre-paid balance below $15. Similarly, when a subscriber tops-up or purchases some product, it is the best time to push another offer to them. To make marketing effort relevant, the technology should enable real-time contextual marketing.

Campaign ROI: When marketers have to run tens of campaigns in a single day, it becomes critical not only to track each and every marketing message going out, but also track customer responses and conversions. A good mobile marketing technology should help accurately compute ROI for each campaign in real-time.

Inventory Management: Operators have to manage and prioritise their SMS, voice and advertising inventory, optimally allocating it among different internal marketing teams and advertising partners.

IT View - Implementation Experience and Ease of Deployment

It is important to evaluate the technology from the view point of IT Managers and Traffic Managers. Ideally, they would like to deploy any new technology platform with minimal effort. Since a mobile marketing platform deployment is expected to increase the volume of campaigns, network traffic needs to be optimally controlled. It should not choke existing network capacity; it should serve end-to-end needs of mobile marketing so that post deployment maintenance becomes easy.



High performance

Campaigns are revenue-generating activity. Any downtime in the application or slow performance of the system can result in lesser campaigns and messages per day, resulting in lesser revenue. Another key aspect would be to manage the traffic optimally. Traffic manager should be able to have a real-time control over the total traffic with ability to abort, pause and resume traffic. He may have to share his network with different teams and even for local marketing teams. He may have to manage network load and black-out periods accordingly. Mobile marketing platform has to provide traffic managers an instant control and visibility to campaign traffic at any point of time.

Deployment experience in a large operator environment

Mobile Operators have a complex IT environment with hundreds of systems, different protocols and data formats, multiple process owners, huge network traffic, and so on. Deploying a new platform in this environment needs a fair understanding of systems and operational requirements. Performance is another critical criterion, since mobile marketing platform has to deal with millions of subscribers and billions of events. Prior experience of deploying the platform in a large volume environment will always help.

Plug and Play architecture

Quite often, subscriber information is spread across disparate OSS/BSS systems. A mobile marketing technology should be integrated with these systems for consolidating subscriber data in real-time. On the other side, a mobile marketing platform should also interface with network elements such as SMSCs, OBD systems, WAP gateways for sending millions of messages per day. An open architecture will make integration easy and reduce the deployment time to weeks or months.

Easy maintenance and support

Mobile marketing involves many processes, tasks and applications and it is important to understand if the platform can support end-to-end mobile marketing needs. The platform should be capable of satisfying marketers’ needs to run campaigns at every stage of customer lifecycle. Having multiple systems to run different types of mobile campaigns will only add to process inefficiency.

Post-deployment of the software, whatever issues that arise in production environment should be resolved quickly. As new versions of the software are being updated, it needs to be tested within a very short time so as to keep the production environments running. This requires the vendor to take the responsibility of ensuring that marketing activities are not disrupted.

Once the technology is operational, it is very much essential to provide 24*7 support in terms of resolving technical and functional issues and any other issues that may arise in live operator environment.

IT and Traffic View – Ease of deployment, traffic control & Maintenance

Need Importance

Deployment expertise Operator’s IT environment is complex, needs domain expertise

Easy maintenance Easy to manage and maintain one platform that multiple systems

Ease of integration Open architecture to integrate with OSS/BSS and network systems

Deployment effort Less resources and deployment time

Post deployment support Vendor should provide 24*7 support post deployment

High performance System should guarantee high performance with full traffic control



Summary

Mobile as a marketing channel is unique in many ways and naturally brings in a lot of challenges for operators. They need a technology platform specially designed for mobile channel, addressing these challenges.

Primarily, as discussed, mobile marketing technology platform can be evaluated from three crucial dimensions. From a CXO's point of view, the technology should improve customer experience by managing customer lifecycle proactively, increase revenue by effectively using all selling opportunities and save costs by bringing in a fully integrated and automated platform. From a marketer's view, it should bring in marketing agility by giving them total control over campaigns in real-time. From an IT or Network team's perspective, it is important to see how easily the platform can be integrated and managed and how much volume it is benchmarked to process.

Third generation mobile marketing technology products like Neon from Flytxt have been designed with these functional and technical considerations in mind.

About Flytxt

Flytxt is the technology leader in conversational mobile marketing. Neon, the third generation mobile marketing platform from Flytxt enables mobile operators and service providers unlock the potential of mobile as a direct conversational marketing channel.

Flytxt, a founding member of Mobile Marketing Association, pioneered mobile marketing agency business with successful projects such as Orange Wednesday and Cadbury Txt ‘n’ Win. In 2007, Flytxt sold its agency business and launched its technology platform. The company is led by mobile marketing experts with decade long domain experience. Flytxt’s Corporate Headquarters are in Trivandrum, India and offices in New Delhi, Mumbai, London, and Frankfurt.

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