CASE STUDYO2 TELEFONICA
One of the main challenges for Mobile Operators is customer churn. Industry statistics indicate that 30%-40% subscribers leave mobile operators in mature markets each year. Whilst the operators are using CRM/CVM systems and some very intricate customer churn propensity models to predict customers likely to leave, offering customers deals through existing contact channels has done little to reduce this significant business issue - customer churn.
The overall objective of the project was to contact O2 customers that were near the end of their existing contract and had a propensity to leave the network, in a meaningful and effective manner. The additional objective of the service was to investigate the impact of proximity marketing when used for customer acquisition and upsell to existing customers.
The agreed scope was to investigate if the blend of location based marketing and deep audience insights (customer information) could deliver better business results compared to existing marketing mix and customer contact strategies for customer retention campaign. Existing contact channels included outbound dialler, direct SMS, outdoor, TV and Internet advertising.
- Retention, Loyalty (Churn reduction)
- Upselling, Acquisition
- Customer Engagement & Customer Experience
- Effectiveness of LBM vs traditional marketing mix and customer contact strategies
The project strategy involved using new approaches to analysing customer data in conjunction with geo-location and the latest digital mobile marketing strategies and tools. iMOBMEDIA's strategy included the use of real-time location (via geofence) and known customer value to deliver tailored SMS offers when the customer is in proximity to an O2 retail store. This ensured that only the right customers were contacted via contextually relevant and valuable messages at the appropriate moment. Our campaigns were based on characteristics, preferences and real-time proximity to the 69 O2 retails outlets nationwide.
To demonstrate the effectiveness of location-based marketing (LBM) compared to existing contact channels, it was agreed that a base of 200,000 users would be targeted with location-based marketing + existing marketing channels versus an additional unbiased sample of 200,000 customers would be contacted via the existing marketing channels only.
The project focus took a business view of how the retention and business proposition worked in an end-to-end service including analytics at system level, customer segment level and store level to provide an end-to-end solution delivered via a managed service. The platform is enabled by light touch integration with the client's CRM systems, the iMOBMEDIA real time location server and cloud based media platform.
An independent market research project completed the program to receive the view of customers that participated in iMOBMEDIA's campaign via location-based SMS offer - the highlights as follows:
- Over the duration of the initial campaign over 135,000 location based marketing (LBM) offers were sent to customers in proximity to O2 stores, delivering on average 5 times redemption rates (purchases) compared to control group (existing contact strategy).
- 30% of redemption price plan and upgrades on day offer was sent to targeted audience.
- Using our location-based SMS solution, iMOBMEDIA achieved an impressive contact rate of 67% over the 69 O2 retail outlets nationwide for the campaign.
- 20% of all customers receiving the text showed it to others (on average 8 people) - This is of significant value in terms of Word of Mouth and important Net Promoter Score benefit to the brand. About two thirds of those who received a text offer actually recall receiving it. Of these, 8 in 10 read it immediately with the balance reading it later.
- The SMS offer worked in a positive way for O2. For example, 8 in 10 saw it as means for O2 to demonstrate how much they appreciate their customers and greatly increase the O2 customer experience.
O2 Telefonica effectively implemented iMOBMEDIA LBM solution to create relevant offers and engagement in the physical world. This enabled to build better customer relationships through real-time location and showed that iMOBMEDIA's LBM approach outperformed the traditional customer contact strategy.
Bridging the online and offline marketing efforts with iMOBMEDIA's LBM made it easier and opportune for O2 clients to visit their nearby O2 retail stores and create in-store engagement representing 67% boost in contact rate and 5 x redemption rate compared to control group with 30% redemption rate on day offer was sent.
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