Stimulating Empowered Customers

© Convergys Corporation. Page 1 | 17 White Paper Number, 402105 Issue 1

Stimulating Empowered Customers

Customers today are educated and empowered

Customers access services and products across multiple companies and switch at their discretion. It is a multi-SIM card, device, app, channel and WiFi world we live in! Services have to work on their devices, meet their needs, be delivered in their language and they will be used when it is convenient for them. Customers will entertain offers at their preferred time, device and channel of the device that is convenient to them at that time. Then they will broadly communicate the experience they had with their friends in public and private.

Consider this: 60% of business leaders surveyed say that customer engagement is their top priority, while 84% of business leaders believe that customer engagement will surpass productivity as the primary driver of business growth. [1] Why so much focus on the customer? It’s simple, really. Fully engaged customers spend more, stay around longer, and ultimately, turn into advocates for your brand, using their social power to recommend, refer and ultimately sell your product or service for you. [2]

Customer engagement has transformed as power has shifted from the business to the

empowered customer. Campaign Management System (CMS) technology used within

Customer Lifecycle Management (CLM) processes to orchestrate proactive highly

personalized Below The Line (BTL) campaigns stimulate behaviour that improves customer

satisfaction and will increase revenue, share of wallet and retention.


Source: Convergys Executive Scorecard Series Research

Every communication is an opportunity to engage the customer to build a deeper relationship and create greater awareness of the value of your products and services. The more relevant and timely the offer, the more likely a customer will take notice, act, repeat and advocate. Understanding and then tailoring proactive promotions based on a customer’s behaviour, preferences and needs, enables you to provide a more personalized experience. This will endear the customer to trust that you have their best interests in mind. Then the customer’s perception of your offers will become "communications of opportunities, prevention of loss of service and awareness or recognition of upcoming life impacting events" instead of "spam from my carrier!"

At the same time, Telco’s are struggling with where to focus their efforts and dollars due to:

Fierce competition - loyalty is earned on a daily basis and churn is high.

Market saturation - focus is no longer on new customer growth/acquisition.

Shrinking ARPU (Average Revenue Per User) - need bigger wallet share of subscribers.

Price is king - hard to differentiate services and products, customers have multiple-SIM cards. High number of ATL (Above The Line) campaigns

with similar packages, customers are confused; Telco contact centers have difficulties explaining

24%

28%

33%

38%

40%

49%

0% 10% 20% 30% 40% 50% 60%

Staffing and support of phonerepresentatives

Automated phone systems

Decisioning, analytics andoptimization systems

Staffing and support of eCarerepresentatives

Social media listening andengagement platforms

Proactive Communication andnotification technologies

Differing Investments to Better Customer Experience


Personalizing offers for millions of subscribers - requires automation to ensure rapid time to production and effective use of customer data to tailor personalized campaigns.

Campaigns are not effective - can cannibalize profits with ATL (Above The Line) price wars, manual processes are expensive, lack of personalization reduce responsiveness on offers.

Difficulty in making customer data actionable - effective propensity and/or churn models are impacted by availability, latency and/or quality, a must to empower personalized, context rich real-time engagements.

Organizational maturity - understanding business drivers and levers, customer needs, customer experience or journey, campaign planning or KPI connected employee compensation.

Customer value and customer experience are now the key focus of marketing teams - it is really all about responding to the customer’s needs by learning from their behaviour to improve their experience, brand awareness, retention and wallet share. The customer’s behaviour can be found in the customer data that comes from responding to proactive campaigns and promotions, usage data, CRM data, Customer Satisfaction (CSat) surveys and so on.

Source: Convergys Executive Scorecard Series Research


Every campaign goal should be to stimulate customer behaviour to increase revenue, wallet share and retention through contextually rich campaigns that cultivate a relationship with the customer. The goal is win/win - the customer looks at you as a trusted service provider that is providing desired experiences, and therefore, will spend more money through use of valued services.

Tools, processes and techniques to create more effective promotions - CMS (campaign management systems), CVM (customer value management), CVD (customer value development), CLM (customer lifecycle management), CLV (customer lifecycle value), Revenue stimulation, ARPU stimulation, behavioural campaigns, BTL campaigns, Push and blast campaigns, Personalization, Micro-segmentation, Real-time marketing, Customer centricity, Customer experience management (CEX or CEM), Customer journey, Contextual marketing, 1to1 marketing and so on.

Whew….there are a lot of options…most overlap, some require organization changes, process changes, cultural changes, additional KPIs and new technologies. The key is that the customer is empowered, there is data (too much?) to learn their preferences and every touch point with a customer is an engagement opportunity to build a relationship that will be fruitful for both parties. Dazzle the customer with ease of use, value, context and relevancy and you will nurture an advocate and increase your revenue!

Where to start?

Below The Line (BTL) campaigns executed by a real-time Campaign Management System are key enablers to ensure success in engaging customers in rich contextual offers that stimulate the customer to act.

BTL campaigns target specific groups with special characteristics, are generally shorter term, almost always look to create an underlying change in behaviour, are efficient, highly measurable and maximize response rates. They are an efficient mechanism to conduct campaign trials (Champion/Challenger or A/B tests) to learn how customers respond to stimulus, pricing, packaging and channels by setting different thresholds in parallel campaigns. Customer Lifecycle Management is a process that organizationally looks at a customer’s value over their lifetime (present and future

End state result is that the marketing is focused on the customer experience and the

customer's perspective is changed from a “carrier that spams me” to a “valued service

provider that provides efficient communication and offers.”


state) to ensure the customer experience in each stage is consistently valuable and fosters a deeper relationship, while extending a customer’s knowledge, reach and use of products and services. Generally, states are: customer acquisition, activation, adoption (account optimization, loyalty building and renewal), retention and customer win-back.

Customer Lifecycle

Figure 1 – Customer Lifecycle

A Campaign Management System (CMS) is a suite of tools that enables marketers to automate the process of campaign creation, approval, scheduling, and handling opt-in (behavioural (usage based) or response) and fulfilment notification. It provides visual results of the campaign through a lifecycle and presents key performance indicators in near real-time dashboards and provides historical results in reports. The best of breed CMS solutions:

Have the ability to schedule white list based as well as real-time enrolment of customers.

React in real-time to business events (such as activation) or user events (such as usage for SMS/voice/data, recharge and so on) and are able to accumulate these over days, weeks, months.

Have real-time decisioning engine as their campaign execution engine to handle large scale parallel campaigns that are multistage or recurring that use business/user events to trigger and use customer data to personalize the offers.


Use a data mart to enable the capture and feedback loop

for campaign results and customer data. Use analytics to allow scientific and exploratory analysis

of the campaign results and customer data to convert big data to smart and actionable data.

Here are some ideas to improve the customer experience, stimulate behaviour and increase revenue via BTL campaigns in several stages of the customer lifecycle.

Activation

This is the key opportunity to influence, entice and excite a customer’s perception and behaviour. Although activation is a one-time event, the “handling” of this lifecycle stage should be the first of many campaigns to cultivate deeper the customer’s understanding of your product, processes and services and develop your relationship. It will also build your understanding of their behaviour, which will identify their needs/preferences that can be used to more effectively engage them in future campaigns.

Figure 2 Interactive Campaigns

Examples of context rich personalized campaigns that can be run are:1. The first campaign would welcome them aboard, stimulate

them and educate them on how to recharge. How it would work:

A customer in motion tends to stay in motion – use real‐time events as triggers to

communicate offers in the customer journey. It is when they are using your services you can

get the benefit of the “top of mind” experience.


a. Real-time Activation event triggers one of three

campaigns running in parallel, which can be configured such as:

i. If the balance when the activation occurs is below $10, then send this SMS offer

1. “Welcome to TelCustomer! Recharge your card by the 15th, we will give you 15% more. You can go to www.TelCustomer.com to find out different ways of recharging.”

ii. If the balance on the SIM card when the activation occurs is between $10-20, then send this SMS offer. Simply clone the first campaign and change the text and threshold: 1. “Welcome to TelCustomer! Recharge your card with $10 by the 15th, and

we will give you 25% more. Go to www.TelCustomer.com to find different

ways of recharging.”

iii. If the balance on the SIM card when the activation occurs is above $20, then send an different offer via using e-mail so more content (graphics/logos) can be used. Campaigns can also involve Partners, this shares costs of marketing, strengthens brand image, and gives more touch/visibility opportunities. Simply clone the first campaign and change the channel, text and threshold. This could be done as follows::

1. “Welcome to TelCustomer! If you will recharge your card by the 15th, we

will send you a voucher for some cake and ice cream at Baskin Robbins to celebrate the start of a beautiful relationship. Why wait till your birthday or anniversary, let’s celebrate now!

You can go to www.TelCustomer.com to find out different ways of recharging.”


b. Responding to the customer’s behaviour - the Real-time

Recharge event triggers the reactive portion of the campaign. Here the following happens:

i. The recharge event triggers the campaign execution engine to send an event to a fulfilment system, once the event is returned showing successful fulfilment, then a notification is sent out to a customer over SMS.

1. “Dear 555-555-4214 Thank you for recharging $1.2, your balance

is now $6.5.”

ii. The amount of recharge is accumulated, then checked to see if customer has crossed the threshold for the reward within the timeframe. If so, an event is sent to the fulfilment system, once the event is returned showing successful fulfilment, then a notification goes out to a customer over SMS:

1. “Dear 555-555-4215 Thank you for recharging $12, your balance is now $14.5. You can enter *123# at any time and we will send you the latest promotions.”

iii. The recharge event triggers the campaign execution engine to send an event to the fulfilment system, once the event is returned showing successful fulfilment, then a notification goes out to a customer over SMS (or use e-mail again and add more fun graphics):

1. “Dear 555-555-4216 Thank you for recharging $6.23, your balance is now $8.5. Please use this voucher number at any Baskin Robbins in the city. XC4134ZP Welcome aboard and enjoy!”


Monitoring newly activated subscribers

2. The second interaction with a new subscriber would use a multistage campaign to monitor for any activity by customers that have been activated within the last 10 days:

Figure 3 Monitoring newly activated subscribers

a. If no activity in next 5 days – chances for churn are very high. So stimulate first to recharge by offering 15%. Wait 5 days, if nothing then offer 25% of what they recharge, wait 5 more days, if nothing then offer 50mb of data if they recharge $5. You may want to try different channels also on subsequent campaigns to discover preferred channel.

b. If there is activity on any of these days, stimulate them to recharge based on the thresholds used in the scenarios above

Evangelising other products and services

3. The third campaign can also be multistage – start after 30-60 days from activation and focus on cross sell to evangelize other services/products from your portfolio. If a customer opts in or not, you can continue to provide them new and/or unique offers on a delayed, but automated fashion.

Figure 4 Evangelising other products and services


Here the idea is to learn how the customer responds, for example, channel, time of day, which services and so on. Micro-Segmentation can be an effective tool to focus the campaign based on behaviour gathered so far for the services/products a customer has used, such as, balance on SIM card, frequency of recharge, and change in activity, demographics and so on.

Adoption This is the stage where a customer has had experiences with your products, services and processes and it is time to mine customer data to further personalize campaigns. Ideas for campaigns are numerous, here are a few that you can try. Mix and mash offers/channels, micro segment your customers using analytics and conduct lots of trials to learn and mine more customer data to further personalize campaigns:

Loyalty – Run 2 customer whitelist-based campaigns every day to celebrate anniversaries and birthdays. Everyone wants to be recognized and valued – this is an easy way. Create a recurring daily broadcast campaign that refreshes the whitelist of customers to contact before the campaign is run. This gives you two contacts per year to recognize and celebrate your relationship. Give some reward, partner with another company to extend your marketing budget and visibility, make it fun and build that relationship!

Data Teasing – target non/low users with limited offers to get them to start/increase usage. Then follow up with a package.

Create data demand by driving customers to other channels that use data - CRM, Facebook, Twitter, Pinterest, Vine, Snapchat, YouTube, Web - ensure subscriber knows they have choices to learn more and opt-in, they will use data on their preferences.

Sleepers – monitor for lack of activity (use a multistage campaign) for a duration or use analytics to target customers with declining activity for 3 consecutive months, need to wake up before validity is lost on SIM card (want them to spend/usage not recharge), there are also channel

Onboard campaigns are critical to engaging customers and ensuring the customer journey and

experience are enriching. This will reduce early churn, increase revenue and reduce calls to contact

centers while further expanding a customer’s understanding of product/service offerings.


sleepers that use one channel but not another that can be stimulate to use additional channels.

Multi-SIM card users - will spend when they see a deal, opportunity to cannibalize competitors revenue by stimulating them to use alternative channels on your network.

Programs – pre to post-paid, BlackBerry packet adoption, data dongles, bundles, or push them to Self-service promotions – “text *1234# and find all latest promotions you are eligible for!”

Reload stimulation – incent them to recharge, then cross/up sell once they have recharged to generate revenue and extend the engagement.

Usage stimulation – Segment your customers into bottom 25%, middle 50 %, upper 75% and apply different offers to entice them across voice, data, SMS or combinations of channels.

Partner programs/promotions – push your customers to their locations, both brick and mortar as well as Web. Extend your marketing dollars and visibility.

Forgiveness requests – outages, dropped calls, reduced data speeds, scheduled down time and so on. Customers respect honesty and humility, expect robust service, but love free stuff!

Proactive Retention

Retention is the positive side of churn – it is the people you save that continue to produce revenue and communicate to their friends about the experiences they are having with your products/services. “Looking at churn rates by customer segment illuminates which types of customers are at risk and which may require an intervention. It’s a nice simple metric that tells us a lot about when and how to interact with customers... But also to predict what’s going to happen in the next [period].” says Jill Avery a senior lecturer at Harvard Business School and an author of HBR’s Go To Market Tools. [3]

Determine who is at “risk” to churn by looking at numerous factors: Not aware of validity deadline – want to “warn” them so

they can extend the use of services.

Personalization ‐ CMS can be integrated to your business subsystems to retrieve a customer’s

device information, to determine what services they have available to use, what services a

customer has used in last 90 days, longevity, and current balances.


Downward trend of activity – they are not enticed by offers. Lack of recharge over period of time and no balance – they

are not going to use services any more. Using higher rate of activity with short validity and

downward trend of recharge – they are cleaning out their money before they go.

Multi-SIM card customer has dwindling data usage over trailing 3 months – they are very price sensitive and maybe getting better offers from competitive Telco.

Not all customers produce revenue that is above the price of acquisition and activation. If through the customer lifecycle of activation and adoption you can learn who are the “right kind of customers - the kind with high potential for long-term relationships with the firm,” [4] then campaigns used in this stage can target the right customers to produce valuable ROI.

Proactive retention is focused on trying to stimulate valued customers to change their behaviour through personalized campaigns that will engage them into programs/services/channels that fit their needs/preferences or to prevent them from losing services. Churn can be the result of months of bad experiences or a bad fit. All relationships are built on the bedrock of communication that is relevant, two way and brings value to both sides. Tracking a customer’s behaviour, allows a campaign to be tailored to engage the customer a positive journey of experiences, opportunities and products/service that they value.

Here are some examples of successfully fielded campaigns to inspire more ideas that you could tailor to your customers:

1) Saving Grace - Run 2 parallel customer whitelist-based campaigns that reoccur daily to target customers that have 5 days and then 2 days left of validity on their SIM card. Communication is to provide a service to them to ensure they don’t lose services, and show we recognize and value their relationship – this is easy and effective! Create a recurring daily broadcast or interactive campaign that refreshes the

Many firms are attracting the wrong kinds of customers. We see this in industries that

promote price heavily up front. They attract deal seekers who then leave quickly when they

find a better deal with another company,” Before you assume you have a retention problem,

consider whether you have an acquisition problem instead. “Think about the customers you

want to serve up front and focus on acquiring the right customers. The goal is to bring in and

keep customers who you can provide value to and who are valuable to you,” says Avery. [4]


whitelist of customers to contact before the campaign is run. Based on the customer’s value, you could extend their validity, offer them packages/services for a discount or period of time, or just remind them of the deadline.

2) Listening Lucy – Run multistage real-time event triggered campaign that listens for a segmented customer list to recharge. If no recharge happens in 15 days then a stimulus offer is sent based on past behaviour and customer value.

3) Burning recharge Renaldo – Create a recurring daily broadcast or interactive campaign that refreshes the whitelist of customers who recharged in the previous 24 hours to contact before the campaign is run. This campaign would stimulate the customers in this segment to use variants of voice (on/off net), in combination with data and SMS volumes to use the money just recently recharged. Pushing them to use data intensive ‘app’ applications like downloads. Social media is a great way for them to enjoy the service while increasing revenue for you. Another option is to send them a broadcast campaign that directs them to a self-service promotions – “text *1234# and find all latest promotions you are eligible for!”

4) Churning Charlie – Run a campaign that reoccurs daily to targeted customers that have been scored to have a high propensity to churn. This would be a recurring daily interactive campaign that refreshes the whitelist of customers from this segment to contact before the campaign is run. Based on a customer’s value and previous behaviour, you could offer them packages/services for a discount or period of time, stimulate them to recharge, which extends their commitment to you and shows they are responsive to offers and allows you to learn more about them.

5) Multi-SIM card Milli - Multi-SIM card users are generally easy to spot: they typically have a low off-net/on-net call ratio, very few mobile terminated calls and no mobile terminated off-network calls [5]. Run a multistage real-time event triggered campaign that listens for a segmented customer list to be on the network. Stimulate a customer with offers discounted for alternative services to their usual usage patterns for a period of time. For example, if a customer only uses data, give them off-net minutes at a discount for 15 days once they use 10% more data than they normally use. This gives you double revenue – more data, as well as, off-net voice while at a discount. It is still incremental revenue over what they were previously using.


Campaign Pitfalls

The following highlights some of the more common pitfalls when running campaigns:

Cannibalizing revenue Price wars - generally ATL problem. Rewarding existing behaviours - would have done

this anyway, instead of stimulating new behaviours. Enabling or even training customers to game the

system - waiting for reward before topping off…could be result of above.

Prevent with better (micro) segmentation or tighter thresholds on enrolment.

Falling in love with a channel, type of campaign: Prevent by using or learning a customer’s

preferences/needs, deeper analytics, personalize deeper with your campaigns, trials are a powerful method of evaluating customer preferences.

Communication saturation - can't tell difference between company service changes, alerts/notifications, rewards and offers: Prevent by having a clear, defined and

continuously updated contact strategy that will be enforced by your CMS suite.

Offer fatigue – too many offers, too many different offers: Prevent by utilizing advance capabilities like hold

off time between campaigns, campaign guards to ensure overlapping offers do not occur, further micro-segment or personalize the campaigns and ensure the contract strategy is updated frequently.

How do loyal relationships translate into cost savings? Consider the cost of serving a long‐

standing customer versus the cost of courting one. Across a wide range of businesses,

customers generate increasing profits each year they stay with a company. In financial

services, for example, a 5% increase in customer retention produces more than a 25%

increase in profit. Why? Return customers tend to buy more from a company over time. As

they do, your operating costs to serve them decline. What is more, return customers refer

others to your company. And they'll often pay a premium to continue to do business with you

rather than switch to a competitor with whom they're neither familiar nor comfortable. [4]


Conclusion: Keys to Success

"Understanding how to motivate customer engagement and to monitor and manage customer engagement behaviours will become essential [to the success of an organization]" [6].

Improve customer experience - cultivating a relationship to stimulate customer behaviour that brings value to them and you! Learning more about a customer's behaviour while helping them traverse efficiently through a customer journey, assisting continuously in the customer lifecycle (activation, adoption, retention, reactivation).

Personalize to increase context for the customer – relevance drives interest, which can stimulation action that drives relationships and then revenue.

Trials - start with customer insight (looking back via analytics) and move to a better customer experience (how did they act – behaviour based on stimulation and/or engagement). Test and learn - many campaigns are run in “parallel" – duplicate campaigns with different segments, threshold and offers and/or rewards are very common – to prove successful offers that are used regularly for lifecycle states, seasonal usage or promotional types.

More visibility to campaign results/effects - propensity to take/churn, segmentation, effectiveness of campaigns (MROI) are all driven by customer data that is effectively organized to be efficiently used analytically both by campaign planners and the campaign at run-time.

With the customer empowered ‐ CLM, CMS and BTL working together as processes, tools and

methodology can increase revenue, share of wallet and retention by nurturing relationships

through a personalized experience in a customer’s journey.


Footnotes [1]: Source: Bluewolf’s state of salesforce review 2013-2014 [2]: Source: http://www.marketingprofs.com/store/product/2243/the-rise-of-the-customer-marketer?adref=bebcs2243&utm_source=bmlist&utm_ medium=email&utm_campaign=sponsored&utm_term=leadnurturing&utm_content=cs [3]: Source: http://blogs.hbr.org/2014/10/the-value-of-keeping-the-right-customers/?utm_medium=referral&utm_source=pulsenews [4]: Source: http://www.bain.com/Images/BB_Prescription_cutting_costs.pdf [5]: Source: https://www.lumata.com/downloads/3_Lumata_Capture_and_converting_multiSIM_users.pdf [6]: Source: <http://www.msi.org/reports/customer-value-management-optimizing-the-value-of-the-firms-customer-base/


Portfolio Real-time Campaign Management Solution.

Value Added Services: Call Completion Messaging Multimedia Services Platform.

Online Charging.

About the Author

Mark T. Arrington is a Director of Product Development and Market Strategy at Convergys. He has been directing the product development of self-service systems for over 11 years, the last 3.5 focused on Campaign Management Systems utilizing Convergys’ world-class Telco-grade real-time Decisioning Engine

About Convergys

Convergys is the global leader in Customer Management and Technology, with over 125,000 employees in 31 countries around the world. Established as a market leader for over 30 years, our heritage and diversity gives us a deep understanding of the core network and the systems to which we connect. Our customer experience products are cost effective, sustainable and scalable no matter what the size of your business. As well as utilising the latest technology to offer innovative, new services for our customers, our comprehensive portfolio of established products allows us to deliver customer-centric solutions which will enhance your omni-channel delivery.

Contact details

Telephone:+44 (0)1614951000 Web: www.convergystechnologies.com

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Stimulating Empowered Customers