Targeted marketing works - and how

Guy TaqlmiReducing churn by 17%, a 10% boost to ARPU or an 18 fold increase in previous revenues‾ Guy Talmi, senior marketing director of Pontis, tells Annie Turner how his company has delivered.

AT: What do you do and who are your main customers‾

GT: We have 16 customers including mobile, cable and triple play providers. They include 3 Scandinavia, Brasil Telecom, China Unicom, Delta Three, HOT Nextel Communications Argentina, Orange and Pelephone.

Pontis created the Market Delivery Platform, which enables service providers to market to each customer through dynamic adaptation of the product offer and their buying history. This means service providers can package, re-price, cross-sell and recommend services using various Business Templates.

AT: There seems to be much more talk than action about targeted marketing - does it work‾

GT: Yes, it does and bear in mind that with ordinary direct marketing, 2% to 3% response rate is the norm and 4% considered a triumph.

Yet in one instance where the aim was to increase the take-up of Java games and ringtones, our customer's campaign increased content use by 17% (€3 per user per month) - a 10% growth in total ARPU. To achieve that, we helped our customer launch 15 offers to five sub-segments of non or low volume content users. Benefits included 50% of all games at Happy Hour and cross-selling such as buy a ringtone, get a game free and so on.

We helped another to increase music revenue by marketing to nine segments identified by the operator. Again average content spend per user increased by €3 per month, representing a 12% growth in overall ARPU. For yet another 25% of those targeted upgraded their voice plan, which provided a 10% growth in monthly ARPU from the targeted sector.

AT: What about reducing churn‾

GT: One operator identified a set of churn indicators by tracking changes in use in a youth segment, such as a 30% decrease in SMS over a couple of months. To combat churn, the operator built a set of personalised retention offers, such as get a 50% discount of SMS for €5 a month. If individuals didn't respond, the operator followed it up with an offer of 100 SMS per month for €5. This led to an 8% reduction in churn among the target group.

Another provider used the churn indicators of fewer top-ups and for smaller amounts among the pre-pay customer base. Again the offer of benefits at exactly the right time, and follow-up offers to those who didn't respond led to a 17% reduction in annual churn in the segment.

AT: Isn't this about novelty value - can it be sustained‾

GT: Yes it can, if the offer is right and if the provider doesn't get the response they want the first time, they can follow up and refine it. All our customers have stayed with us and renewed and extended their contracts to other areas of business because of the results they've seen.

It's usual that we work with our customers on one specific area to start with and then are asked to get involved in others, perhaps moving from a particular pre-pay offer to helping to market a triple play package, such as we are doing with HOT.


AT: What's the secret of your success‾

GT: We've talked at great length with Gartner, which places us as part of CRM marketing in its Hype Cycle, but agrees that we don't only fit there, but "˜float' above many other functions that are usually considered as separate entities - such as product catalogues, business intelligence systems and campaign management.

Typically markers within service providers have great difficulty looking at all the different aspects of a user's behaviour because they're stored in different places. Also, they find it impossible to carry out dynamic analysis of how behaviour is affected by offers, so they can't follow up or refine them.

A survey we've just carried out found that 47% of marketers within mobile service providers cited the technological challenges of accessing data held on different and non-interoperable legacy platforms as being the biggest barrier to delivering personalised communications. The second biggest was deemed to be organisational structures.

We enable our customers to run and refine ten or 20 offers at once, offering a benefit triggered by response. Timing is crucial and we're getting more precise all the time. For example, we've found that if a pre-pay balance falls below €2, we are more likely to lose the customer than prevent them churning, for instance.

AT: Is external advertising involved‾

It can be if that's what our customers want. We can extract and provide information to operators' partners, such as Medio Systems and Jumptap who serve third party advertisements to mobile users.

AT: What's your turnover‾

GT: More than a third of our staff are customer-facing and the size of our deals is getting bigger all the time - each runs into millions of euro, that's all I'm at liberty to say.