Wake Up Sleepy Customers to Revive Profits

Established comms providers typically have lots of customers who never think about changing their service. They do not know what tariff they selected, their bill is paid automatically so they never have to check it, and the only reason they order a new handset is because the comms provider contacted them to suggest an upgrade. Short term thinking may lead some to concentrate on customers who are willing to change provider because wooing them can noticeably boost returns within the span of a financial quarter, but the customers who regularly change provider are only a narrow and unrepresentative slice of the market. Some will be won today, but others will be lost tomorrow. They will keep changing providers in order to pursue the latest handset, or the cheapest price. In my experience, there are far more customers who signed a deal and then stuck with it because they have more important things on their mind. You might think of them as ‘sleeping’ customers: they are alive, they are content and they are getting what they want, but they are not paying attention to you. They can be very profitable because a customer who never complains will cost less to serve. But are they as profitable as they might be? What, if anything, is being done to examine the profits that might be generated if comms providers could persuade sleepy customers to think about their service?

I talk to industry insiders about the profitability of their most loyal customers but there is a natural reluctance to share data. This further inhibits the identification of opportunities to engage with that segment in ways that will have a measurable impact on profits. You can have all the data in the world, but if you lack ideas then the data will not give them to you. Comms providers will inevitably engage in a wide spread of marketing, so it may seem that even the sleepiest customer is already being given many reasons and opportunities to upgrade their service. However, this ignores the key challenge with any marketing campaign: do people pay any attention to it? We may reasonably assume that the sleepiest customers are also the least likely to notice a campaign that has no specific relevance to them. Trying to motivate them through indiscriminate advertising ignores the greatest advantage of their existing provider: the tremendous wealth of data obtained about the customer’s preferences and behavior from the many years of service they consumed.

Comms providers know who people call most often. They know who they receive messages from. They know when they use their phone, and where they are when using it. They may even know that they are using multiple networked devices at the same time. For example, it does not take much analysis to notice there are spikes in social media during certain live sporting events, so it follows that many people are using their phone whilst watching their television. Given all we know about customers, there is the potential to find patterns relevant for new offers targeted at groups within the sleepers, encouraging them to wake up and make further purchases at the same time. Comms providers have all the data they need, and many of the people who read Commsrisk possess the skills required for this kind of analysis.

The idea of using data to wake sleepy customers will feature during today’s episode of RAG Television. The guests will be Bill Leahy and Nev Phillips of Symmetry Solutions, and they will talk about working with one of Britain’s largest mobile operators to mine usage data and make personalized recommendations to customers who are otherwise content to leave their tariff unchanged. You can watch live and join the discussion today at 8am Eastern, 1pm UK and 6.30pm Indian time. There is no need to register; anyone can view RAG TV through its dedicated webpage. You can add the show in the right time zone for your diary by clicking here, or you can subscribe to the broadcast calendar to have future shows automatically uploaded to your diary.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.