Yaron Assabi yaron@dsg.co.za

Why is Mobile the most important customer channel in Africa ?

 Hidden  Agenda  ü  Mobile has the highest

reach and is the most rich channel for customer insight

ü  Low cost service

channel

ü  Enhanced security for Banking

ü  Personalisation

ü  Mobile Loyalty

Banking Evolution “ Banking is not some place you go, banking is something you do! “ ~ Brett King, author Bank 2.0 The future of banking will be almost entirely about mobility , as mobile devices are the most pervasive medium in Africa .

ü  Social , Local & Mobile convergence is poised to create a truly original and markedly customer-driven banking experience.

ü  The commoditization of products within the industry is making it very difficult to compete on price.

ü  New entrants such as Google and PayPal are experienced in building online relationships and are used to developing and marketing transparent products.

ü  In order to compete Banks need to engage the customer and create Loyalty based on customer insight and personalisation, which make mobile the most rich & cost effective channel of choice

PayPal’s New App – Pay with your face

Source : eNCA www.youtube.com

http://www.youtube.com/watch?v=5NHrDlNnR6U

Simple Value Chain

Complex Value Chain

Fina

ncia

l Ins

titut

ion Telecom

Operator

Convergence of the South African mobile transactional space is very evident, with players from both sides of the spectrum converging to compete for ownership of mobile customers for transactional services

The potential threat for financial services companies in terms of being disintermediated in the micro to medium transactional space has however become very evident, with mobile networks increasingly expanding their footprint outside of the mobile space, offering

•  Airtime sales

•  Short term insurance

•  Mobile payment services and

•  Micro payments

A large degree of mobile banking usage is centered around airtime purchase and transfer. An increasing use of digital channels amongst mobile telecommunications operators implies a direct threat to Banks digital channel strategy &

customer ownership becomes increasingly more important.

Telecom & Financial Services Overlaps & Trends

Airtime Purchases

74%

Payments 15%

Other 11%

The single most popular

transactional service in cellphone

banking remains airtime purchases,

with 74% of customers using it for

this purpose, and only 15% paying

accounts via their phones.

Airtime purchases dominate the use of mobile banking applications, followed by airtime transfer, Rural users (69%) Urban users (51%) Mobile purchases of Prepaid Electricity Rural Users (33%) Urban users (21%) Money Transfer Rural users (44%) Urban users (34%) Prepaid vs Contract usage Rural Users (94%) Urban Users (80%) Average mobile spend across SA population* Prepaid (R165) Postpaid (R387) Internet Access across South Africa •  59% of South Africans have Internet access, •  5% access it on a PC only, •  27% on a mobile phone, •  27% has access to the Internet through a combination of mobile and

PC. •  Only 13% of rural areas have Internet access on a PC, •  61% of rural areas that have Internet access on a mobile phone.

Source: Arthur Goldstuck, World Wide Worx, Mobility 2012 research study * These figures are across the South African mobile consumer base and therefore indicative only.

Airtime Purchases dominate mobile banking

Search in site...

News

Gov’t fund tobuyIndependentstake

In-depth - - Top

Vodacom huntsfor future growth

Added by Craig Wilson on 20 May 2013.Saved under In-depth, TopTags: Beyond Payments, DStv, GSM Association, GSMA, HermanSingh, MultiChoice, ODM, On Digital Media, Shameel Joosub,Standard Bank, TopTV, Vodacom

TweetTweet

5 2

Vodacom'hunts'for'future'growthThe operator believes growing demand for data can help offset decliningvoice revenue. But it’s considering over-the-top services, too, to ensure itkeeps growing its revenues and margins. By Craig Wilson.

Shameel Joosub

Vodacom expects demand for data to offset a decline in voice revenues in the next few years, butwith the margins on data slimmer and the price of data being driven down by a competitivemarket, the operator is also hoping so-called “over-the-top” services — content, socialnetworking and financial services are three examples — preserve margins and ensure demandfor data continues to grow.

In South Africa, total data traffic on Vodacom’s network has increased 40% year on year,according to group CEO Shameel Joosub, with average monthly data usage per smartphone usernow at 139MB. Joosub says data growth will offset revenue declines and the operator “should beable to continue to expanding margins”.

“Data doesn’t dilute margins in any way. Our margins are still expanding slightly in SouthAfrica,” he says. Almost a third of group service revenue (that is, revenue from subscribers usingthe network rather than things like handset sales) is expected to come from data in three years.

Worldwide, many operators are turning to over-the-top services — or at least trying to — in

Connect with TechCentral

Follow TechCentral on Twitter

Connect with TechCentral on Facebook

Connect with TechCentral on Google+

Latest Tweets

Home About Advertise Newsletter Contact

HOME IN-DEPTH JERM NEWS OPINION PEOPLE PODCASTS REVIEWS START-UPS WEEKEND ADVERTISE

About Advertise Newsletter Contact Tuesday, May 21, 2013

2

Like

Vodacom expects demand for data to offset a decline in voice revenues in the next few years, but with the margins on data slimmer and the price of data being driven down by a competitive market, the operator is also hoping so-called "over-the-top" services - content, social networking and financial services are three examples - preserve margins and ensure demand for data continues to grow.” ~Shameel Joosub, CEO Vodacom

* MFS – Mobile Financial Services – TechCentral Article, 20 May 2013

Recent Statement from Vodacom re: MFS

Hypothesis vs. Agenda"

CUSTOMERS x USAGE x TENURE SALES ACQUISITION COST + COST TO SERVE SUCCESS FORMULA =

How many customers would

you acquire?

How much do they spend with

Bank?

How long will they stay with

Bank ?

What does it cost to acquire a new

customer?

What does it cost to serve a customer?

!

Unique CVP based on Customer Segmentation

INCL

USIV

E

PERS

ON

AL

BUSI

NES

S

MIGRATE CUSTOMERS TO

DIGITAL CHANNELS

Competitive Offerings

Target Market

Needs & Wants

Ease of Implementation

in each segment

Cost of Implementation

in each segment

Organizational Constraints within each

segment

Strategic Importance in each segment

Market Trends

SBSA SWOT

Traditional Mobile

Behavior

!

Unique CVP based on Customer Segmentation

Posteitaliane, the Italian postal service, launched the Poste mobile service in Nov 2007 on the Vodafone network and has grown into the biggest MVNO in Italy with over 50% of the MVNO market share

Source: Nereo Financial Institutions & MVNOs Analysis Document, 2010

Posteitaliane MVNO Case Study

Postemobile charges users transaction fees on the MFS operations thereby increasing its customer wallet-share.

Source: Nereo Financial Institutions & MVNOs Analysis Document, 2010

Posteitaliane Integrated core banking & mobile proposition =Posetmobile

ü  Ownership of the customer brand relationship is an imperative to drive single-account and single SIM usage

ü  Control over the customer experience has a direct bearing on the above, as it drives not only the customer perception but adoption of technologies and indirectly acquisition

ü  Ownership of the customer base is equally important, as the cost of acquisition & cost to serve is an investment into an asset traditionally handed over to other parties

ü  Proposition differentiation drives the consumer perception and acquisition/usage. The Digital Channel proposition therefore directly affects the overall brand perception

ü  Operational (& technical) flexibility in a rapidly changing industry is important to ensure the maintainence of differentiated position, as well as to accommodate existing initiatives within the bank

ü  Commercial Model flexibility informs both differentiation capability and profitability overall

ü  Investment Requirement is important ultimately as it may restrict future agility.

ü  Dependency on network relationship is self explanatory, as networks will become direct competitors in terms of digital channel functionality and core products and services.

CEM Critical Success Factors in a blurred environment

ü  Banking + loyalty into a SIM card to keep relationship with your customers beyond the traditional banking / loyalty card.

ü  A personalized menu to drive use of brand content

ü  An opportunity to push personalized smartMessage

Mobile apps

Bank

Points

Insurance

Get Closer to your customers through a branded SIM Card and /or SmartPhone

Source : Gemalto Smart Message

The Next Big Thing in Mobile

Source : Business Insider

T –Commerce –Multiple Screens

Source : eConsultancy

Source: http://econsultancy.com/uk/reports/the-progression-of-agency-value

Bigger idea

Simple idea

Big idea

Keep these front of mind

Progression of agency value

Mobile Plays a key role in every step of path to purchase

NPR slide"UI & UX Critical to the Customer path to purchase

Personalized messaging & menu options, relating to the

subscriber package and

profile.

Live Chat with Customer

Care. View Usage for the month.

Access

ODP Apps & Content.

Recharge using Credit/

Debit Card with PIN

Manage Your Phone/

Bank

Customer Experience- ODP / Self Care

ü  Mobile meeting & services directory

ü  Video chat on the go & webinars on financial products & services

ü  Cutting edge video

collaboration experience from your mobile device

Mobile Video Chat with your Personal Banker "

Mobile  Marke0

ng  

Mobile  Customer  Service  

Know  your  customers  Know  their  problems  

Proac5ve  help  where  needed  

Know  your  customers  Know  their  preferences  Give  them  more  of  what  they  want  

Real-­‐5me  knowledge  Targeted  adver5sing  

Enhanced  brand  loyalty  

Business Value

ü  It is now recognised by the industry and brands that a large portion of

the marketing budget ( 25-50% ) should be spent on mobile.

ü  We forecast that in Africa over the next few years the majority of marketing spend will migrate to mobile as brands recognise the effectiveness and ROI .

ü  Mobile advertsing is seen by brands as a way to make products and services more affordable for low ARPU customers ( “Freemium Model“), and a way to retain them longer .

ü  “More value for money for the attention span”

Mobile Advertising

Mobile Web Browsing Incentive Plan Pay as You go Mobile Internet ¥  Attract new data users with time-based access ¥  Offer “no commitment” trials ¥  Promote new ways to access content Launch Pad for new services ¥  Promote new services without big media

campaigns ¥  Offer services based on triggers such as URL,

content type, user profile, and others Targeted Mobile Advertising ¥  Use sign-up pages for advertising:

“This service is brought to you by Cape Times” ¥  Offer discounts for services in exchange for

advertising ! !

MY CREDIT

Bad debt Demographics

Average balance

MY PERSONAL

DATA

MY STUFF MY IDENTIFIERS

MY INTERACTIONS

MY RELATIONSHIPS

MY CONTEXT

MY DEVICES

Name

Address Gender

Profile Preferences

SIM SoftSIM

Serial Number Device details

Number SIP Number

IP Address

Location Presence

On/Off Roaming

Pictures Videos

Calendar Address Book

Bank School

Friends Workplace

Browsing History

.mobi domains QR Codes

A wealth of untapped data for Personalisation

PERFORMANCE GUARANTEE…

DIFFICULTIES OF REACH CAPACITY IN A COMPLEX ENVIRONMENT

TARGETING CAPACITY…

Variety of handsets… …operating systems … …and stakeholders

Getting the right message to the right person.

Ensuring a real Return On Investment

•  Uncertain ROI for many campaigns.

•  No clearly defined metrics.

!

A Complex Environment

Source : Gemalto

29

Joint venture between the UK’s three largest mobile

network operators

68.5 million mobile subscribers

IGLOO

'These guys [Weve] have more data than anyone could ever imagine, (and) there's now going to be segmentation by location at scale,' says James Connelly, managing director of mobile marketing agency Fetch. 'No one has really cracked location very well for that reason - the scale has always been difficult. This will be the first time you can really do it.‘

Marketing Magazine - Feb 2013

WEVE Case Study – We Locate

30

Digital Card – Your Green Loyalty Solution

Mobile  Loyalty  Digital  card  issuing  and  management  

One-­‐to-­‐one  messaging  

Partner  and  coali5on  programs  

Analytics  

Mobile  Offers   Issuing  &  Distribu5on  

Acceptance  &  Redemp5on  

Clearing  &  Repor5ng  

Mobile  Payments  Branded  Closed  

Loop  Card  

Integrated  Online    Account  

NFC  Card  Provisioning  

31  

A Unified & Integrated Experience

32

ü  Create secure loyalty cards (pin code required) ü  Identify a customer, with barcode (13 types supported) or QR

code ü  Define your company’s contact details (website, e-mail, phone

number, store locator etc.); these become available with the digital card information

ü  Manage all card data including regular balance and status updates

ü  Viral distribution (invite a friend) directly from contacts on the mobile

ü  Promote your program on social networks (Facebook and Twitter) providing rewards to customers for posting feedback

ü  Communicate: broadcast or personalise information, text and image based

ü  Add augmented reality to separate your brand from the rest ü  Incorporate your Social Responsibility ü  Mobile Device Management vs Lost card ü  NFC payments as part of the platform

Loyalty Platform Configuration

Proximity Marketing using mobile for real-world interaction

34 | Touchatag |August 2009

Use phone camera to scan image and see discounts

Viral Distribution

Content Platform

01. Create a viral

content repository

02. Launch the Viral Effect

opinion leaders"

ü  Rewards related to specific forward events:

ü  Aspirational instant win with “off line” prizes ü  Certain rewarding / Digital gadgets

ü  “Viral” Contest: “most wanted content”

ü  Prize-draws for the most-active users (Top FWD users) ü  Prize giving for “shortlisted content” authors (UGC)

ISTANT WIN: forward it to 3 friends and find out if you have won an official World Cup football

CERTAIN REWARD: Forward the ring-tone to 5 friends and you’ll receive an exclusive full track version

UGC CONTENTS: upload and forward new viral contents. Enter in the top10 and you win !

FWD USERS: the more you forward, the more chances you have of winning the new prize car

Key Motive = Reward

They don’t leave because there’s a compelling reason to leave. They leave because there’s no compelling reason to stay

Why customers leave?

ü  By simplifying traditional practices by applying the best of today’s technologies

ü  And pioneering the design and implementation of the next generation of technology & Marketing concepts

ü  DSG has set a new level of expectations for innovative consumer brands.

DSG Powers Return on Marketing Innovation

ü  Mobile is entering an area where it can deliver experiences and branding – an emotional medium at last

ü  Mobile is the most relevant , cost effective channel with the highest reach and most richness in Africa

ü  It isn’t about mobile as a ‘channel’ but about the customer journey/experience and the roles mobile best plays in making that as easy, useful, relevant and enjoyable as possible

Some parting thoughts….

Yaron Assabi yaron@dsg.co.za

www.dsg.co.za yaronassabi

www.youtube.com/dsg247

www.facebook.com/dsglimited