Home Latin America 2013 Continuous engagement – monetizing the mobile Internet

Continuous engagement – monetizing the mobile Internet

by david.nunes
Udi ZivIssue:Latin America 2013
Article no.:3
Topic:Continuous engagement – monetizing the mobile Internet
Author:Udi Ziv
PDF size:453KB

About author

Udi Ziv is the CEO of Pontis. Prior to joining Pontis, Mr Ziv served as President, Enterprise Group at Nice Systems. Earlier, Udi held several senior executive positions with SAP AG, including General Manager of SAP Small Business Solutions, Managing Director of SAP Labs Israel and VP R&D of the SAP Portal product.

Udi Ziv holds a BS degree in Computer Engineering from the Technion, Israel Institute of Technology.

Article abstract

In a world that is rapidly adopting smartphones, monetizing the mobile Internet requires more than sophisticated data price plans. Service providers will need new technologies to complement their existing infrastructure with real-time capabilities. Marketing to a single-consumer segment lets them offer products that don’t exist in the regular catalogue, and more. But the real shift begins with the mindset- striving to find ways for continuous engagement with subscribers and the ability to deliver personalized experiences that address subscribers’ individual needs.

Full Article

Mobile operators across the globe are seeing tremendous growth in mobile data. In Latin America mobile data is picking up momentum with 14 commercial LTE networks launched last year, and 16 additional networks expected in 2013. According to Cisco’s forecast, mobile data traffic in Latin America is expected to grow with a 67 per cent CAGR between 2012 and 2017.
Nevertheless, not everything is rosy in the mobile Internet garden. Most prominent is the mismatch between the tremendous data usage growth and the declining revenues of mobile operators. Monetizing the mobile Internet, it seems, is still an unresolved issue. Voice and SMS, which have always been the main source of income for operators, have become commodities, and their revenues are declining faster than the growth of data revenues.
Operators all over the world are now struggling to find ways to accelerate their gains in the mobile data world, and avoid becoming ‘dumb pipes’ that function like Internet service providers (ISPs) for mobile connectivity. Different strategies are being explored. Some carriers use LTE networks as a differentiator and are trying to migrate as many subscribers as possible as fast as possible to the 4G network – luring subscribers with subsidized handsets. Others want to link quality of service and pricing, and some operators are still focused on developing the data habits of their subscribers, overcoming price perception obstacles.
There is no doubt that the flat rate, ‘all you can eat’ data plans will have to become more granular. But to become successful in the long run, operators will have to fundamentally change their marketing approach.
The new mobile subscriber
As technologies, applications and devices have evolved, so did the needs and expectations of subscribers. Today’s subscribers have changed and have a completely different set of expectations from their service providers
Accustomed to the high level of personalization offered by e-commerce sites and the immediacy of social media, mobile subscribers expect to be treated as individuals, and not as a demographic segment. Just like Amazon can automatically match offers and suggestions to each customer, subscribers expect mobile operators to understand their unique needs and provide them with the personalized service and marketing interactions they deserve.
In many instances, mobile service is perceived as a commodity in the eyes of subscribers, and power is shifting from the service provider to handset and OS manufacturers. In this environment subscribers easily switch between operators and churn decisions become easier and more impulsive than ever.
Bridging subscriber needs and carrier goals
In the old, ‘voice-dominated’ world, operators could afford to focus entirely on ARPU, with very little insight into subscribers’ usage habits and needs. Today, however, they must find ways to bridge the gap between subscribers’ expectations and their own marketing objectives. This will enable operators to create a differentiated experience for their subscribers and overcome the commodity perception.
The data world actually opens up an opportunity to gain intimate knowledge and understanding of subscribers. Smartphone users spend over two hours a day with Internet content and data-rich mobile apps – 41 apps on average! Imagine how much insight can be gained about a subscriber’s needs and preferences by looking at his data usage patterns; and consumers’ appreciation if those needs are responded to in a personal and contextual way.
Continuous engagement
Creating a real engagement and differentiation cannot be based on a single event or campaign but rather should be a continuous, on-going process. While the engagement part of this may be clear, the continuous has several different aspects:
1. Moving away from marketing campaigns towards a longer term development plan of each subscriber. This requires understanding the marketing state of the subscriber, which includes many parameters, such as spending level, usage patterns, calls to customer care, variety of services and satisfaction level. Marketers should decide realistically where they want the subscriber to be in a few months’ time. Then, they should set up a step-by-step plan of how to take the subscriber from his current marketing state to the desired one, and proactively execute it. Take Maria for example – she has a mini-Galaxy smartphone, but she uses mobile Internet only when WiFi is available and she has no data package. It will not be a one-day process to make Maria a heavy mobile Internet user, but it may still be possible with a conscious step-by-step approach. This may start for example with a free trial period, then low daily tariffs offer for browsing, and after a while migrating into recurrent data package with personalized budget control tools.
2. Analyzing past and current in order to better understand the context and predict future . Which offers did the subscriber respond to? What type of phrasing generated a higher response rate? Which communication channel did the subscriber prefer for data package offers? A detailed-level analysis should allow marketers to analyze at the highest resolution across a massive subscriber base, and implement adjustments.

Figure 1: A continuous engagement approach increases mobile data usage by focusing on individuals’ needs
Marketing to a one consumer segment
In Latin America it is common knowledge that you need to “think relationship before business”. A relationship, however, cannot be built with a demographic segment containing thousands of users. It is only by gaining insight into the usage habits and preferences of individuals and developing personal communications that operators will be able to implement continuous engagement.
Delivering a personalized experience requires integrating subscriber intelligence and network data with the ability to respond and deliver offers in real-time. The state of each subscriber must be monitored with data kept about usage patterns, applications, willingness to spend, sensitivity to speed, social interactions and so on. Is a subscriber interested in specific content? Consuming most data on weekends? Interested in an enhanced viewing experience of sporting events? Operators must be able to answer such questions and build a detailed, multidimensional profile of each subscriber. Such an approach will enable understanding subscriber needs and attitudes, spot opportunities for enhancements, and provide differentiated data services to different subscribers.
A final ingredient of marketing to a single consumer is a closed-loop process that provides the ability to automatically fulfil personalized offers that are not part of a product catalogue. For example, a tailored marketing proposal that was accepted by a subscriber should be implemented in the accounting systems and be reflected in the subscriber’s bill.

Figure 2: A closed-loop process enables fulfilling individually-tailored offers that are not part of the product catalog
How does marketing to a single consumer at look in practice? Consider a bridge data bundle use case – a subscriber has consumed his data package eight days before the renewal date. With the traditional approach, the subscriber would be offered a pre-packaged bridge data bundle – with a fixed (and usually expensive) price tag, regardless of the time remaining or the specific customer. When marketing to a single consumer, the subscriber’s profile would first be analyzed: is this user typically exceed usage? Is there anything exceptional with his behaviour this month? What is his price sensitivity? How did he react to previous offers? The entire scenario would be personalized – from the detection of a personal utilization threshold, the bundle structure, size and price, and up to the time and channel in which the offer would be sent. What’s the difference? A customer-tailored approach increases response rates five to tenfold. Subscribers feel much better about accepting the offer, as they consider it fair and reasonable rather than accepting it because they have no choice.
Monetizing data consumption
With insight into subscriber’s data usage and the ability to continuously engage and respond to needs, operators complement data plans with value-based pricing. Value can vary between subscribers. Some will prefer a fixed fee for unlimited Facebook use while others will care about download speed and video quality. All depends on the value perception of each individual and for the price the subscriber is willing to pay.
Activities should not only be limited to data consumption packages. An operator can deliver a video explaining a new smartphone user how to configure email; provide personal content recommendation that may appeal to a user; launch ‘try and buy’ campaigns; or provide suggestions for applications used by friends.
Migration to 4G can also be carried out more effectively, complementing an ATL campaign with personalized offers. This may include activities such as proactively approaching customers with high potential for migration, matching promotional offers to the value of each subscriber, and offering a free speed booster when watching a video to illustrate the high-speed experience.
Personalization opens up the door for dynamically-priced data packages, such as bridging packages offered to subscribers who consumed their data before the end of the billing cycle. Pricing can be adjusted to the expected data volume required, the time till the end of billing cycle, and each user’s pricing curve. Monetization of data can involve application-based pricing; quality-of-service pricing; speed boosters for video-hungry subscribers; and discounts for subscribers within a specific cell which has an over capacity.
In a world that is rapidly adopting smartphones, monetizing the mobile Internet will require more than sophisticated data price plans. Many service providers will probably need to acquire new technologies complementing their existing infrastructure with real-time capabilities. Marketing to the individual subscriber gives the ability to offer products that don’t exist in the regular catalogue, and more. But the real shift begins with the mindset- striving to find ways for continuous engagement with subscribers and the ability to deliver personalized experiences that address subscribers’ individual needs.

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