Por Que Verizon Me Piensa Entiende?

Transcription

1 2/13/2011 Por Que Verizon Me Piensa Entiende? Why does Verizon Think I Understand [Spanish]? MBAC/D 698 Business Intelligence Arturo Rosales

2 Why does Verizon think I understand Spanish? Or, better yet, why do they think I would particularly enjoy TV programming in Spanish? Is it because I am Hispanic and have a Hispanic surname? Actually, I used the Yahoo! Babel Fish ( to translate from English to Spanish just to get the title of this paper. My Spanish speaking ability is not even at the pre-school level, and yet I continue to receive offers written entirely in Spanish promoting Verizon s Spanish language programming. See the attachment at the end for a sample of the latest offer. I think Verizon should know better. This paper intends to examine Verizon from the outside, but will try to take an insider s perspective. I will explore the company s strategy, products, and services in relation to the market competition, and try figure out from a Business Intelligence view, what system they may or may not have in place that leads to the decisions to send certain marketing offers to certain people in certain areas. History, Products, and the Market Verizon was formed in 2000 with the merger of Bell Atlantic and GTE, both extremely large and far-reaching corporations with long histories. The goal of the merger was to create a combined company with the scale and scope to compete as one of the telecommunications industry's top-tier companies and provide a full package of other communications services. ( Verizon is a household name providing television service, land line telephone services, wired wireless communications for a wide variety of devices for residential and commercial customers. Based on their advertising campaigns, Verizon prides itself on the speed and quality of their network, especially for wireless service. It s hard to think of Verizon without picturing the Can you hear me now? guy in the black jacket. However, for the purposes of this paper, I will focus on the products in the offer I received: a bundle of TV, internet, and home phone service. Verizon claims to have the only Fiber Optic to home with their FiOS package that carries both the TV and internet connections as well as the clearest phone calls of any provicder. Verizon s competitive strategy is based on a combined model of product differentiation and low cost leadership, or at least that is the way they present their products. They want you to believe that their product is 1

3 better and offered at a better price. The truth is that they operate in a market with limited choices but fierce completion for customers among the top competitors. The strategy employed by all (AT&T, DirecTV, Cable providers, etc) is to offer a lower initial price and hope that when the regular price kicks in, you are happy enough (or lazy enough) to keep the service. Of course, each provider is aware of that, and offers for free installation to reduce the switching costs to their service are the norm. In the end, all the competition to provide the best technology at the lowest price makes them all about the same. The only differences being the customer interface experience and the bundling advantage Verizon and AT&T have in the areas where they are also the telephone company. The Offer The marketing communication I received was the common Triple Play offer with a bundle of home phone, internet, and TV for a reduced price for one year. This is virtually the same pakage that AT&T offers under the name U-verse. The unique part of this offer was that it was in Spanish and that it specifically highlighted the number of channels with Spanish language programming. In any language, the deal is undeniably attractive. So much so, I even fell for it once. I cancelled DirecTV and signed up for the bundle. Eventually, when the promotional period ended, I switched back (in my opinion, the DirecTV DVR was worth losing some of the value in the Verizon bundle). Other than the usual fine-print and lack of real details, the offer upset me because it was in Spanish. I am of Hispanic heritage, but I can t speak, read, or write very well, and 99.9% of the TV programs I watch are in English. I can only surmise that Verizon thought I would be more likely to respond to marketing in Spanish because of my name. Why? What other pieces of information do they have or have access to that could have given them a better picture of me and what kind of offer to which I would be more likely to respond? Below, I ll take a look at how someone structuring a BI system for Verizon might go about it, not only to present the best offers to the people most likely to respond, but to manage other aspects of the business as well. The KPIs for the BI system As the business intelligence (BI) manager, I would want to set up a system that tracks key performance indicators (KPIs) such as number of subscribers, average length of time spent as a customer, the rate that customers are gained and lost, and from what or to what competitor. The business should also be keenly aware of the timing of customer gain/loss in relation to when the special offers are made, when they expire, and when the promotional period for that customer ends. I would 2

4 have similar KPIs for the response to my competitors offers and promotional periods. I would look at where demand is coming from to see where to expand certain services. I would want to know the conversion rate of inquiries that turn into sales. In addition, Verizon could also track: Those who selected a different language during customer service calls Pay-per-view movies or events ordered: frequency, genre, language, what sport, etc. Premium channels or packages: movies, kids channels, sports, international, etc. The only way for the business to grow is to gain customer base, and the KPIs described above are key to understanding both the dynamics of that base, and the effect that various marketing campaigns and offers might have on the current and potential customers. Each of these KPIs can be broken down and fine tuned to reveal even more about the customer. Using the offer I received as an example, maybe there has been an increase in people from my area who have signed up for the Spanish channels package. Verizon saw that and figured they should send something to everyone with a Hispanic name in the area (I checked with my neighbors who are not Hispanic, and they did not receive the same targeted offer). The BI system could also offer similar external facing KPIs used as marketing tools. I would call these bragging points that they would want the customer to be aware of. For example, Verizon could show a ticker on the web page, a billboard, or TV commercials that continually counts number of people who have switched to FiOS. On the wireless side, they already use dashboard like graphics to advertise the level of coverage they have over the United States. Data sources, system design, and use The most available and plentiful source of data would most likely be current and past customers. Using records for each person or household, a profile could be built that gives a rich picture of that customer s relationship and behavior with Verizon over time and across the various services. Collection of data could be from many internal sources. The most obvious is the customer account, but others could be surveys taken when signing up or cancelling service, customer service calls for upgrades or downgrades, and important information from the call (did the customer press the button to switch the call to Spanish?). This data would have to be collected from the various business sectors and 3

5 geographical locations, then cleaned and processed with an ETL system into a data warehouse. From there, the profiles for each customer could be built. A sample dashboard with some important data for a customer profile is shown to the right. The customer profiles can then be aggregated and analyzed to reveal trends like young people tend to switch providers more readily or households with children order more pay-per-view movies or any other useful trends. Once the business knows its customers, it can use that knowledge and combine it with external data on non-customers to predict how they might behave or respond to marketing offers. Some examples of available data sources are: surveys conducted by third party entities, ratings from agencies like Nielsen, demographic information from the census, and market segmentation data from PRIZM. For example, the most common PRIZM segments for my town of Redondo Beach, are: Source: 4

6 By signing up and logging into PRIZM, one can see the relative weight of each demographic in that zip code and see the detailed description of each segment, social group, and lifestage group. The BI system can be designed to find the customers that fit the profile of Young Digerati, see how they behave, and apply that knowledge to design a marketing campaign targeting non-customers of that demographic in that area. Beyond marketing, there are many departments that could benefit from the availability of a complete customer profile. The customer service department could more efficiently route calls based on location or language preference, or by knowing what services the customer has or had in the past, employ better techniques for selling more services or upgrades. In operations, installers or service technicians could be dispatched based on knowledge of who the customer is. These groups would access the BI system in a form of a dashboard or screen with the customer information, and maybe a list of recommended actions based on how similar customers were handled in a similar situation. On the strategic side of the business, the HR department could track demographic trends to help match the workforce to the customer base. The groups that interface with other business partners can use the trends to push for additional programming or services that are gaining popularity, or pressure them to improve in the areas that are losing customers. And of course, the executives would use the data in aggregated and summarized forms to monitor the state of the business and also to help determine what technology to develop and where to deploy it. Implementation of such a far-reaching BI system would require a substantial investment of resources and a firm commitment from executive management. The executives would have to be convinced that such a system would be worth the cost of implementation. In addition, the managers in each business sector and geographical area would have to be willing to join the effort and supply their data on an ongoing basis. The users of the system would have to be trained. Of these, the most important factor is the continuous support of executive management. Without commitment from the top, the system may not be implemented with the proper strategic goals of the company in mind, or could die out quickly as a fad. I expect that as a technology and communications company, Verizon would already have in place an excellent infrastructure for transporting and storing data. It also appears that they are partnered with companies providing various levels of data management and ERP solutions. A partial list includes: Oracle, Quest, and KNOVA. However, from the Quest article Verizon Wireless Cuts 5

7 Application Support Costs by $1 Million with Foglight it is clear that there is not a common system used across the various sectors and regions. Verizon would be best served to employ another system to collect and aggregate all the data in order to use the information they already have and combine it with the external market data as described above. Oracle, a company they already have a relationship with, provides CRM through Siebel, a company it acquired in Other large vendors of CRM solutions are SAP, Salesforce, Microsoft, and NetSuite. Overall, it seems that Verizon is well positioned to implement a BI system as I have described because most of the data they need is already owned by the company, and what they don t have they can easily acquire. In fact, they may have something in place or in work, and all it need is someone with the right insight and awareness to optimize it. Quest Article: KNOVA article: 6

8 INTEROFFICE MEMO To CC From Roger Gurnani Dr. Kala Seal, PhD. LMU Arturo Rosales Executive Vice President and Chief BI Solutions Team Information Officer Verizon, New York Los Angeles, CA Dear Sir: It has come to my attention that our direct mail marketing effort for the Triple Play promotion is not achieving the projected results. Projected Actual Direct Mail Response Rate 12% 7.8% Sales Conversion Rate 25% 14.2% Overall Promotion Effectiveness 3% 1.1% After reviewing the criteria for selecting potential customers for the targeted mailing campaign, I have concluded that there was only a limited amount of analysis done to determine which households to send which promotion. For example, thousands of calls were received by those who were already customers or who had recently cancelled and therefore not eligible for the promotion. 1 It was further determined that those selected for foreign language or multicultural programming were only selected by last name, rather than confirmed market research. It is the recommendation of the BI Solutions team that the company institute a CRM tool to improve our direct mail campaigns by doing the following: Collect, aggregate, and summarize customer data across all business sectors Analyze customer profiles to reveal trends about product and service preferences Collect demographic data and market segmentation data from sources such as PRIZM Combine the customer trend profiles with market research to predict new customers preferences In addition to the marketing department, the data should be made available to operations, customer service, and any other customer facing department. Knowing our customers better can only result in improved relations with them. The bulk of the data is already in our systems. All it takes is a commitment from the executive team to champion the cooperation of the different divisions across the country in sharing the data, and for management to provide the strategic insight for implementation of the analytical tools. Such a system will reap great rewards for the corporation and our customers. 1

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