Social Media and the Power of Asian Consumers

© 2014 IBM Corporation

IBM Institute for Business Value

Social Media and the Power of Asian

Consumers

Rob van den Dam

Global Communications Industry Leader




IBM 2014 Global Telecommunications Consumer Survey

22,000 consumers

took part in the

survey in 35

countries, including:

China (1265)

India (1038)

Indonesia (735)

Japan (964)

Malaysia (506)

Philippines (877)

Thailand (616)

2

2014

IBM Telecom Consumer Survey

China

(1265)

Australia

(652)

Canada

(594)

Belgium

(323)

Brazil

(671)

Denmark

(319)

Egypt

(343)

India

(1038)

Finland

(309)

Greece

(738)

France

(1343)

Germany

(831)

Indonesia

(735)

Ireland

(351)

Mexico

(658)

Italy

(560)

Malaysia

(506)

Japan

(964)

Kenya

(322)

Netherlands

(548)

New Zealand

(464)

Russia

(1003)

Nigeria

(550)

Poland

(328)

Norway

(303)

Philippines

(877)

Saudi

Arabia

(306)

South

Africa

(649)

UAE

(320)

Spain

(809)

Turkey

(533)

Sweden

(354)

Thailand

(616)

UK

(657)

US

(1083)



3

60%59%

39%37%

23%22%21%19%18%17%13%11%10%10%8%7%5%5%4%4%2%

-1%-2%-3%-6%-7%-9%-10%-14%-16%-16%-18%-18%

-39%

18%

Gre

ece

Sp

ain

Neth

erla

nds

Ita

ly

Ire

lan

d

Be

lgiu

m

Po

lan

d

Fin

lan

d

Fra

nce

Ge

rma

ny

JA

PA

N

UA

E

Norw

ay

UK

Can

ad

a

US

Sw

ed

en

MA

LA

YS

IA

PH

ILIP

PIN

ES

Den

ma

rk

Au

str

alia

New

Ze

ala

nd

TH

AIL

AN

D

Sa

ud

i Ara

bia

So

uth

Afr

ica

Bra

zil

Rusia

IND

ON

ES

IA

Egyp

t

Me

xic

o

Tu

rkey

CH

INA

IND

IA

Ke

nya

Nig

eria

Net Decrease/Increase Consumer spending MOBILE phone usage (voice calls, SMS, etc.)

(2014 – 2016)

Overall, consumers in Asian countries expect to increase spending on

mobile phone usage

Question: Compared to previous years, are you likely to spend less, the same or more on mobile phone usage (voice calls, SMS, MMS) in the next 2-3 years?



4

53%50%

40%36%

28%

22%22%20%20%19%

13%13%13%12%12%10%8%6%5%5%5%3%2%0%

-2%-4%-4%-5%-8%-8%-10%

-15%-15%-16%

-37%

This is also true for increasing spending on mobile broadband usage,

i.e. accessing the Internet using a mobile broadband subscription

Gre

ece

Ire

lan

d

Ita

ly

Neth

erla

nds

Be

lgiu

m

Sp

ain

Po

lan

d

PH

ILIP

PIN

ES

JA

PA

N

UA

E

Fra

nce

Ge

rma

ny

UK

US

Sw

ed

en

Fin

lan

d

Can

ad

a

MA

LA

YS

IA

No

rwa

y

Au

str

alia

Me

xic

o

Ru

ssia

Den

ma

rk

Ne

w Z

ea

lan

d

Sa

ud

i Ara

bia

Bra

zil

So

uth

Afr

ica

Egyp

t

Tu

rkey

IND

ON

ES

IA

TH

AIL

AN

D

IND

IA

CH

INA

Nig

eria

Ke

nya

Net Decrease/Increase Consumer spending MOBILE BROADBAND usage (Internet from Mobile)

(2014 – 2016)

Question: Compared to previous years, are you likely to spend less, the same or more on mobile phone usage (voice calls, SMS, MMS) in the next 2-3 years?



5

24% 19% 57%

25% 18% 57%

25% 17% 57%

32% 19% 49%

49% 17% 34%

57% 18% 25%

74% 12% 14%

80% 11% 9%MOBILE PHONE

LAPTOP / NETBOOK

Desktop PC

TABLET

Internet-enabled TV

GAME CONSOLE with

Internet connection

eReader

OTHER (e.g. Internet-

enabled Blu ray player)

Very Valuable Moderately valuable Little valuable / Not applicable

How valuable is each of the following devices for you to access the Internet?

For accessing the Internet, the mobile phone has become the most

valuable device

95%

91%

87%

86%

86%

86%

Mobile Phone Very Valuable

Question: How VALUABLE are the following devices for you to access the Internet?



People increasingly access the Internet to use social media, in

particular to communicate with others

6

100 Mio Users (Int)

300 Mio Users (China)

50 Mio concurrentUsers

1.2 Billion Users

255 Million Users

280 Million Users

230 Mio

Active Buyers

194 Million Users

450 Million users

250 Million Users

540 Mio active

users

430 Million

Users

300 Mio Users Int)50 Mio Users (Japan)



Social Networking is the number 2 communication channel in

emerging markets; it’s even the preferred channel for under 25s

7Question: How often do you use the following communications services?

Daily usage communication channels in emerging markets

in emerging markets

use Social Networks

daily to communicate

with others

74%

28%

25%

45%

26%

25%

36%

37%

50%

61%

65%

66%

74%

82%

30%

55%

58%

71%

66%

79%

76%EMAIL

SOCIAL NETWORKING

MOBILE MESSAGING

INSTANT MESSAGING / Chat

MOBILE VOICE calls

INTERNET VIDEO streaming/download

FIXED VOICE calls

MICRO-BLOGGING

VOIP (VOice over Internet)

VIDEO CALLING

All AGES

AGE < 25

1

1



In particular in the ASEAN countries, use of Social Networks to

communicate with others is high

8

55%

71%

76%

77%

79%EMAIL

SOCIAL NETWORKING

MOBILE MESSAGING


INTERNET VIDEO

60%

60%

76%

78%

83%MOBILE MESSAGING

SOCIAL NETWORKING

EMAIL


INTERNET VIDEO streaming

60%

61%

76%

78%

82%SOCIAL NETWORKING

MOBILE VOICE calls

EMAIL


INTERNET VIDEO

44%

71%

73%

79%

81%MOBILE MESSAGING

EMAIL

SOCIAL NETWORKING


MICRO-BLOGGING

1 Instant Messaging 84% (WeChat, etc) 4 Micro-blogging 70% (Sina Weibo, etc)

Daily usage communication channels

Question: How often do you use the following communications services?



9

3 9 %3 8 %3 4 %3 2 %

2 8 %2 7%2 2 %

0%

10%

20%

30%

40%

Indonesia

India

Philippin

es

Mala

ysia

Thaila

nd

Japan

Chin

a

3 9 %3 8 %3 6 %3 0 %

2 5%2 5%19 %

0%

10%

20%

30%

40%

Philippin

es

Indonesia

Mala

ysia

India

Thaila

nd

Japan

Chin

a

12%

57%

31%

Reduce(d)Increase(d)

No Change

15%

52%

34%

Reduce(d)Increase(d)

No Change

Reduction

SMS usage

Reduction

traditional

voice calling

of respondents said they

have reduced – or will reduce

– SMS usage by increasingly

using alternative messaging

channels34%

of respondents said they

have reduced – or will reduce

– traditional voice calling

by increasingly using

alternative voice channels31%GloballyGlobally

One third of respondents said they decreased – or will decrease -spending on traditional communication > growth Telcos under pressure

To what extent have you reduced – or will you reduced SMS usage and traditional voice calling by increasingly using alternative channels?

Global Global



At the other hand, global OTT and Internet category players thrive

10

2004 data as of 9/17/2004. 2013 Market value as of 12/19/2013. 2012 Revenue is TTM.

List excludes Alibaba ($75B), whose private market value would put it in the Top 10.

List also excludes Skype (bought by MSFT in 2011 for $8.5B), YouTube (reported as part of Google) and Paypal (reported as part of eBay)

2012/13 2004

OTT and Internet category players

The market

value of the

Top 15 equals

that of the

Top 100

publicly-

traded CSPs

The top 5

have more

than $115B of

cash on their

balance

sheets



11

in emerging markets

access Social Media

to evaluate telecom

providers and their

products /services

69%

9%

20%

25%

28%

34%

48%

60%

69%

72%

23%

19%

13%

31%

56%

33%

69%Internet SEARCH

SOCIAL MEDIA

RECOMMENDATIONS friends/family

Telco WEB sites

Telco EMAILS & promotional offers

Traditional ADVERTISING

Retail STORES

Shopping PORTALS/auctions

Emerging Markets

Mature Markets

Sources of information on telecom providers and their products/services

The web, social media and word-of-mouth now dominate the traditional

channels for information relating to Telcos and their products/services

Question: What are your preferred sources of information when you are evaluating telecom providers and their products/services?



Social Media as a source of information is in particular popular in the

under 25 age group

Sources of information for under 25s

Question: What are your preferred sources of information when you are evaluating telecom providers and their products/services?12



Word-of-mouth is important as it has become a key factor in

condidering a provider for products and services

13

15%

21%

22%

22%

43%

46%

51%

52%BEFORE BUYING when the provider provides information

When contacting my provider for RESOLVING AN ISSUE

BEFORE CONSIDERING the telecom provider

(REPUTATION)

On first purchase or BEGINNING OF SERVICE

When my provider PROACTIVELY ask for my experience

When I CONSIDER SWITCHING to a competitor

On receiving FIRST INVOICE

Close to the END OF SUBSCRIPTION period

3

67%

53%

60%

57%

57%

51%

1

1

2

2

2

3

3 28%

Key moments of interaction that matter

Question: What are the key moments in interacting with your telecom provider that matters to your?

Global Reputation



Negative word-of-mouth can have a strong negative impact on a

telco’s reputation and, consequently, its business performance

14

10% 49% 42%

13% 62% 25%

20% 46% 35%

21% 46% 32%

25% 57% 18%

26% 59% 15%

29% 50% 21%

38% 55% 8%

40% 50% 9%

41% 49% 9%START considering COMPETITIVE services from other providers

Would TELL OTHERS about the bad experience

Would COMPLAIN to my telecom provider

Would DISCOURAGE OTHERS to use this provider

Would use the services of my provider LESS FREQUENTLY

Would STOP making PURCHASING from my provider

Would post a NEGATIVE REVIEW or comment ONLINE

Would COMPLAIN on SOCIAL MEDIA

Would NEVER USE my telecom provider again

NO CHANGE in behavior

Always/Often Regularly/Possibly/Sometimes Never

Customer responses in case of negative experiences

Question: What would you do in case of a NEGATIVE experience with your telecom provider?

Global



15

58%53%

34% 35%

56% 55%

37%

28%

55%

39% 39%

31%

54%50%

34%

25%

40%45%

34%38%

0%

10%

20%

30%

40%

50%

60%

70%

Have to wait too long

in queue to speak to

Call Centre

Too much hassle to

get through to the

Call Centre

Don't believe it make

any difference

My Provider is

unable to resolve my

problems

Philippines Indonesia Malaysia Thailand China

Always/often complaining to

provider

32%

22%

23%

9%

24%

Reasons of not complaining in case of negative experience

Question: If you not complain to your provider in case of a negative experience, what is the reason?

Telcos are not always aware that consumers have bad experiences:

less than half of consumers always/often contact them in those cases



Telcos should become more proactive in understanding services issues

by trolling social networks to understand sources of dissatisfaction

16

O2's Twitter team

demonstrate their

social media moves

on angry tweeters

London, July2012

O2 UK experienced widespread network

problems affecting hundreds of

thousands of its customers in July 2012,

user anger was boiling over, with many

customers expressing their

dissatisfaction on Twitter. O2, however,

turned the tides, by using Twitter to

deliver fast, professional customer

response and was able to maintain their

brand image by adding humor and

personality to their tweets

Having the official verified Twitter

profile @Airtel_Presence, Airtel scan

for every tweet containing the word

“airtel” in it and giving appropriate

replies to customers and solving their

issues.

Airtel uses social network analysis to

determine customers’ facing problems.

Any mention on social media

(Facebook, Orkut, Twitter, etc.) is

captured and they get in touch with the

customer to get issues resolved.



Word-of-mouth can also help a telco increase brand strength in case

of a positive experience, but what do customers perceive as positive?

17

15%

19%

31%

32%

33%

41%

44%

50%

57%

77%Providing high quality COMPELLING products/services

Giving QUICK effective responses to questions/issues

Resolving issues FAIRLY

LOW PRICES even at the cost of quality/service

Giving EXCLUSIVE offers (loyalty program)

Providing TRANSPARENCY & openness

ENABLING CUSTOMIZATION of products/services

PERSONALIZED & consistent service

PROACTIVELY trying to improve user experience

SEEKING OPINION to develop product/services

Always/often

recommend provider

54%

45%

43%

28%

46%

Positive experiences that make a customer loyal

Global

Question: What are the most important experiences for you to STAY LOYAL to your telecom provider?



18

Groups

Individuals

Reactive Proactive

Mine

ConversationsCrowdsource

Insights

Reply to

Questions

Influence

Influencers

Today Next two years

Respond to

customer questions

Solicit customer

reviews and opinions

Capture

customer data

Identify and manage

key influencers

79%

79%

47%

68%

47%

68%

35%

59%

Applying social approaches to ‘listen & engage’ customers

(±2/3 of telco respondents in Social Business survey)

Source: Institute for Business Value, 2012 Business of Social Business Study

(% CSPs with customer-related social business activities)

Generating positive word-of-mouth, or better ‘influence the influencers’,

is a clear ambition for many telcos to increase brand strength



Another clear ambition is close collaboration with customers: nine out

of ten Telecom CxOs foresee doing so in the near future

19

132%more

88%

38%

88%

3–5 Years

38%

Today

Source IBM 213 Global C-suite study (218 telecom CxOs) –How strong is your collaboration with customers?;

“We focus on increased

collaboration with the customer to

understand their needs and

expectation.”

CMO, Telecommunications, Turkey

Telecommunications CxOs plan to collaborate much more extensively with customers



20

of respondents like to

interact with their

provider on improving

an existing product

60%

60%

56%

38%

26%

22%

22%

21%

6%

IMPROVEMENT EXISTING Product/Service

IMPROVEMENT CUSTOMER CARE

DEVELOPMENT NEW Product/Service

FEEDBACK on COMMUNICATION to market

FEEDBACK on Overall STRATEGY

IMPROVEMENT of Existing CAMPAIGN

DEVELOPMENT of New CAMPAIGN

Other

98%

97%

97%

97%

95%

93%

66%

And the good news is that almost all respondents said they are willing to provide feedback or engage to help them to improve and/or innovate

Topics customers are willing to communicate on with their provider% of respondents

willing to provide

feedback or input

Global

On which topics do you want to provide feedback or communicate with your Telecom Provider to help the organization to improve?



China Telecommunication Corp created an innovation platform to

connect employees, partners and customers

21

Challenges:

Build on knowledge and experience to

innovative and create solutions faster

Anticipate & analyze future needs

such as addition of third generation

(3G) licensing

Bring distributed work groups together

through a unified communication

system

Results:

Enabled marketing teams to analyze new intelligence gathered directly from consumers’ and launch new services using insight on that subscriber

Reduced opportunity costs and risk by expanding sources for new product ideas and by improving idea quality, increasing the chance of marketing success

Allowed 554 new “voices” into the development process during the first six months of the platform launch, with the publication of the first idea a mere ten minutes after launch

“The solution enables us to deliver exciting products to

the marketplace at a faster pace than ever before.”

—Niu Gang, Associate Director, Shanghai Research Institute, CT



However, most telcos don’t use social in an effective way to engage

customers or enable them to provide feedback/input

22

19%16% 16% 14% 14%

8%2%

25%35% 33%

42%38%

41%

16%

Strongly Agree Moderately Agree

Agree/Disagree:

My telecom provider uses Social Media in an effective way to engage with me

Chat Me, Tweet Me, Call Me.

Consumers want choice for

contacting their telecom provider

Question: Indicate to which agree/disagree with the following statements on your Primary Telecom provider?



23

Percentage underprepared

for Social Business

85%

66%

55%

Lack of a cohesive social media plan

Lack of appropriate technology

Legal and security concerns

Lack of leadership support

Concerns about inappropriate use

Competing priorities or initiatives

Difficulty measuring investment returns

64%

34%

39%

25%

15%

52%

59%

Underprepared

for the

necessary

cultural changes

Unsure about

impact of social

business over

next three years

Limited

understanding of

the business value

we intend to obtain

Challenges Telecom CxOs to

implementing a digital strategy

Lack of a cohesive social media plan and problems with measuring

ROI are the two biggest barriers to doing more in the digital space

Source IBM 213 Global C-suite study (218 telecom CxOs) –How strong is your collaboration with customers?;



Questions

24

• What plans have you developed - as a response to OTT’s cheaper

alternatives - to contain ARPU erosion?

• What approaches is your organization using to listen to, engage with

and influence customers?

• How do your marketing, sales, and customer service functions

coordinate around your social initiatives?

• What are your plans to make it easier for customers to interact with

your call centers?

• How could you better involve customers in your innovation efforts?

• Do you exploit social network analytics to understand how your

customers perceive your product and services?



25

Thank you

Rob van den Dam

Global Communications Industry

Leader


[email protected]

www.ibm.com/iibv