In these cash-conscious times, mobile operators need to focus their efforts on more effectively marketing to, and impacting the behaviour of, their pre-paid customers in order to retain customers and drive-up levels of usage.
Traditionally, pre-paid plans have been strongly promoted by operators to immigrants, youngsters and low income customers who needed to gain control over their spending. Tough economic times enticed many post-paid customers to cut costs and shift to cheaper prepaid plans. The popularity of pre-paid has continued to grow because of user-favourable government policies which reduce the number of contracts sold, as well as the ability to keep the same number when switching between operators. Increasingly, the pre-paid market is now expanding beyond the traditional segments.
Given the size and revenue potential of this market, impacting this group of subscribers represents a hugely lucrative, yet under-utilised opportunity to drive average revenue per user (“ARPU”) and reduce churn. If carried out in a targeted and timely manner, addressing pre-paid customers has proven to increase overall revenues by as much as 6-8%. Tactics such as enticing customers to top-up when their balance is low and reviving ‘silent’ customers with contextual offers can pay huge dividends if presented at exactly the right time and within context.
The challenge to retain customers is however particularly demanding in the prepaid sector; it is a notoriously price-sensitive sector and easy for customers to switch providers. Operators should entice customers, such as high-churn risk subscribers and high value subscribers, to top-up and talk more through relevant incentives – closely tied to customer’s behaviour and preferences.
Know your audience
In the past, lack of connected systems between internal departments meant that operators could not act quickly and automatically upon pertinent data, presenting marketers with a challenge in trying to segment and deliver offers which meet users’ needs in a timely manner.
However, technology is now available to allow operators to target subscribers with personalised offers, in real time, in order to entice them to top up more frequently, increase usage, and minimise the all-important silent periods. Pontis’ solution, for example, allows mobile operators to send personalised offerings to subscribers just at the right time and context and accurately track the effectiveness of each personalised marketing offer.
There are tactics that can be used to great effect if the timing, and offer presented are right. We undertook our own analysis of subscribers’ behaviour with a European Tier 1 operator, which revealed that over 80% of subscribers who didn’t talk for 14 days became dormant, or became ‘inactive’, users. The same operator was able to reduce the average time between recharges in high risk customers by 30% and even more important – to reduce the average time elapsed from the account balances reaching zero, until the next recharge by 50%, through ongoing interaction aimed at changing recharge patterns and stimulating usage.
The key was to identify high-churn risk subscribers and encourage them to recharge more frequently through the right retention offer. A few examples below:
- Operators could provide offers such as “if you recharge more than £20 get 10% immediate bonus and 20% discount on calls to a relevant destination.”
2. Benefits might also relate to other lines of business, e.g. top-up £10 and get two ringtones for free.
3. Operators can also automatically target subscribers who haven’t responded to previous incentives, and target them with a more enticing offer, for example: “recharge more than £20 and get 10% bonus on all recharges during the next month.”
These activities encourage subscribers to frequently recharge, whilst promoting other services; giving subscribers an incentive to remain active.
Context is everything
Operators need to work at ensuring that they target the subscriber with relevant offers at the right time. It is essential to ensure subscribers don’t reach zero balance, as each day that passes from this point means the subscriber could be switching provider.
The second factor operators should study is the date of the last call. This is extremely important because as there is no contract, there is no proactive activity involved, and subscribers don’t need to notify the operator if they churn. That is the main reason why so many prepaid subscribers become dormant. The right offer can make the difference between retaining a customer or failing to act and losing them to a competitor.
To summarise, we believe that targeted and tailored offers in the pre-paid sector can pay real dividends. What’s more, the means are now there for operators to harness data on their subscribers’ behaviour and implement marketing offers in real time based on their preferences, ensuring customer satisfaction and minimising the risk of churn.