Is on-demand marketing the way of the future?
Posted Feb 12, 2008
In today's telecommunications-savvy world, it takes a lot more to keep a customer happy than ever before. With so many telecom providers to choose from, customers have become immune to traditional and impersonal methods of marketing. Direct campaigns that have been used in the past -- such as telemarketing and direct mail -- are now becoming too costly to run and are largely ineffective. And lately it seems that everyone is offering a great bargain on phone services. So what's a business to do to stay on top?
Customer Lifecycle Management
Like many other telecommunications-industry experts, Rob Bamforth, an analyst at Quo Circa, believes that a more one-to-one dialogue will be the key to keeping customers loyal, and stresses the role that this approach plays in today's mobile world. This individual-centric approach is being referred to as Customer Lifecycle Management (CLM).
"Since CLM is a relatively new concept, it's difficult to explain or define," Bamforth says. "The way I would describe it is context-oriented mobile marketing."
Another way of describing CLM is "Marketing on Demand." Through the use of real-time behavioral marketing, CLM enables operators to manage, evaluate, and automate customer interactions to support one-to-one dialogues, based on user profiles, behaviors, and previous exchanges. It creates a bond between the operator and the customer throughout the customer's lifecycle so that the operator knows exactly what the customer wants and is able to communicate the right service to her in real time. This approach can help lower churn and increase revenue generated from each customer.
"CLM providers have a major challenge ahead of them, and that is to convince mobile operators that behavior-based marketing is an important opportunity that is worth investing in," Bamforth adds. "I believe it has a future in mobile telephony -- especially in advanced sectors where there is a blurring of fixed and mobile services. This convergence is eating away at revenue generated by traditional services such as voice calls. To find new ways of earning income and keeping customers happy, operators have to differentiate themselves from their competitors -- and to do so in a way that makes a subscriber feel valued and not just a number. CLM can help achieve this by enabling an operator to target an individual person."
One of the companies offering CLM technology in the mobile sector is Agillic, a United Kingdom-based enterprise set up eight years ago to provide an answer to falling revenues and customer disloyalty. Agillic offers operators a unique way to communicate with customers by deploying marketing-on-demand solutions that are quick and easy to deploy requiring little or no integration with underlying systems.
Case Study: Telenor SONOFON
Among Agillic's big success stories is its collaboration with Danish GSM leader Telenor SONOFON, which deployed the company's Pre-Paid and Post-Paid CLM solutions. "Before CLM, customers were migrating to other mobile operators with the belief that they could get better products and services at more competitive prices, without realizing that [we] could offer them the same if not better," explains Martin Kildgaard Nielson, Telenor SONOFON's CRM manager. "This lack of customer loyalty was the result of our inability to communicate more effectively with each of our subscribers and to do so with cross-channel synergy. We needed to address this serious challenge before we could improve our performance in the market."
Agillic provided the foundation for a communications strategy that could manage both inbound and outbound communications with each customer. "Agillic's CLM solution gave us the potential to build a relationship with each customer over time by learning from every dialogue," Kildgaard Nielson says. "It could also support real-time interaction, allowing us to react swiftly to customer behaviors. So if a user clicked on a Web link we could automatically send out a message that was pertinent for that moment in time. All of these capabilities helped the company create a targeted marketing campaign that fit the user profile of each individual high-value customer." Thanks to CLM, during the first year Telenor SONOFON reduced churn among its high-value post-paid customers by 50 percent and increased its average revenue per user by between 5 percent and 10 percent.
Bamforth says he expects that more telecommunications providers will follow Telenor SONOFON's path toward delivering a more individualized service to customers. "There is definitely a future for CLM, but the big challenge is getting broader recognition for this marketing approach and carving out a niche in the telecoms sector."
About the Author
London-based journalist Georgia Hanias is the founder of the media firm Cyrano Media Ltd. Having written for many telecommunications publications, Georgia recently completed a three-part series about Japan for an ITN television news program in the United Kingdom.
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