CUSTOMER SEGMENTATION & SOCIAL NETWORK ANALYSIS

Transcription

1 Customers D N A Look Inside your Customers CUSTOMER SEGMENTATION & SOCIAL NETWORK ANALYSIS Presentation by

2 CONTENTS Customers D N A CUSTOMER SEGMENTATION & SOCIAL NETWORK ANALYSIS CUSTOMER VALUE = ACTUAL VALUE + REFERRAL VALUE CUSTOMER 360º = SEGMENTATION + SOCIAL NETWORK HOW TO UTILIZE CUSTOMER SEGMENTATION & SNA 2

3 Types of Segmentation in Consumer Markets Value Based Life Stage & Socio-Demographical High Medium Low Monitor value migrations Service delivery strategy Resource allocation & prioritization Bachelor Full Nester Empty Nester Targeting new prospects New product development Life stage marketing Solitary Survivor Behavioral Needs Based Cluster 1 Cluster 3 Cluster 2 Relationship Marketing Existing product management Churn prevention Campaign management Competition & SWOT analysis Emotional Rational Brand image Product positioning Communication tailoring New product development Service delivery strategy 3

4 Social Network Analysis Identify relationships between individuals Identify core groups and leader(s) within them Estimates influence that individuals have on their peers Opinion Leader is usually someone who: has many connections in his group His/her connections get influenced by him/her 4

5 Individual VS Social Approach Targeting based on Individual Attributes Targeting based on Social Network Attributes Target the right customers based on Segmentation & Propensity modeling Target Opinion Leaders based on SNA to take advantage of Diffusion Effect Combining those two may lead to exponentially higher ROI 5

6 CONTENTS Customers D N A CUSTOMER SEGMENTATION & SOCIAL NETWORK ANALYSIS CUSTOMER VALUE = ACTUAL VALUE + REFERRAL VALUE CUSTOMER 360º = SEGMENTATION + SOCIAL NETWORK HOW TO UTILIZE CUSTOMER SEGMENTATION & SNA 6

7 Most common levels of Profitability Analysis for Telecom Providers Revenue (ARPU) Revenue only (Average Revenue Per Unit) No account taken of different product margins, cost to serve or expected lifetime (billed revenue). Marginal Profitability Revenue minus the cost of providing the products and services used (interconnection costs, handset subsidization costs etc). ABC Profitability Revenue minus the cost of providing the products and services used, less other costs attributable to the customer, cost to serve (e.g., call center costs if customer calls often). Lifetime Value Revenue that have been captured and can be captured during the forecasted time horizon based on existing and available products, services offerings and channels. 7

8 The importance of Referral Value in Mobile Telephony (e.g. Prepay) Most of the Mobile Telephony Providers offer significant incentives for On-Net usage (free minutes, unlimited with a small fee, etc) Customers, especially prepaid, usually influence their closest connections to move from competition to their provider in order to take advantage of On-Net privileges Why don t you move to my provider and talk for free all-day? 8

9 The Referral Value in Banking based on Family Groups Pension Account Payroll Account Mother Credit Card Payroll Account Deposits Insurance Me Wife Sister Time Deposits Internet Banking Credit Card Internet Banking Opinion Leader Do Financial Institutions group Customers into Family Groups? Do Financial Institutions know Opinion Leaders especially for Business Customers? What is the average Fraction of Family Groups with a significant relationship with the Bank? Are there appropriate offers for supporting not only Customer Share but also Family Share? In contrary dissatisfaction of a member in a family group may lead to defection of other members too Customer related with the Bank Primary Holder Sub Holder 9

10 CONTENTS Customers D N A CUSTOMER SEGMENTATION & SOCIAL NETWORK ANALYSIS CUSTOMER VALUE = ACTUAL VALUE + REFERRAL VALUE CUSTOMER 360º = SEGMENTATION + SOCIAL NETWORK HOW TO UTILIZE CUSTOMER SEGMENTATION & SNA 10

11 Retail Banking Basic Axis of Behavioral Segmentation Activity Transactioners Active Borrowers Active Investors Liabilities Assets Once off Borrowers Dormant Depositors Passive Inactive Inactivity 11

12 Mobile Telephony Basic Axis of Behavioral Segmentation Mature Heavy users Activity Pure Professionals Advanced Professionals / Techno fans Voice Data Mature Basic Passive Inactive Youth / Shared users Inactivity 12

13 Analysis should into consideration both Internal and External data to Validate and Amend database Segmentation & SNA Single dataset of customer records Internal data External data Individual Attributes Customer value Individual Attributes Customer intention to recommend / to defect Customer demographics from DBs Customer socio demographics from MR Customer behaviour - usage Customer needs and attitudes Customer products utilization Social Attributes Customer referral value SWOT analysis Social Attributes Ways & incentives to spread the information Customer Social group / Family circle Social network status, life style, preferences Opinion leader & diffusion energy Ask the Opinion Leader.. Early adopter Customer responsiveness to new services Customer 360 View 13

14 The Next Generation of Target Marketing Individual Attributes Social Network Attributes Next Generation of Target Marketing Social Network Analysis combined with traditional Segmentation enable the identification of the right Opinion Leaders to maximize the Diffusion energy. Effectively, it models a word-of-mouth scenario where an individual influences one of her neighbors to follow, from where the influence spreads to some other neighbor, and so on. The Referral Value is one of the most important components of Customer Profitability but most of the times is not considered at all. SNA & Segmentation could be useless without a right offer that can support the Viral effect. Offer should be Relative with Clear Benefit & Easy to be Spread. 14

15 CONTENTS Customers D N A CUSTOMER SEGMENTATION & SOCIAL NETWORK ANALYSIS CUSTOMER VALUE = ACTUAL VALUE + REFERRAL VALUE CUSTOMER 360º = SEGMENTATION + SOCIAL NETWORK HOW TO UTILIZE CUSTOMER SEGMENTATION & SNA 15

16 Combining Segmentation with SNA for optimizing Targeting A myth about SNA: If an Opinion Leader adopt a new service then his Followers will adopt it 1 st 2 nd X X Techno Fun Segment Traditional Segment X Actually SNA has to be combined with traditional Segmentation techniques in order to optimize your targeting & maximize the Viral effect 16

17 The Effect of the Opinion Leader within Social Groups Early Adopter Opinion Leader Someone that adopts new products/services earlier than others x Someone that influences many others with his/her opinion Data Bundles Penetration within Social Groups 33% 31% Opinion Leader is a more significant Role than Early Adaptor in terms of Diffusion energy x 20% x* x* * With at least one User within Social Group 16% Active Customer Base 7% 17

18 Example of applying a Referral program in Mobile Operators A special code was created offering 1GB of data for one month for free. The offer was communicated via SMS to three different segments: Opinion Leaders that are already users of mobile data Opinion Leaders with high propensity to start using mobile data Not Opinion Leaders that are already users of mobile data The offer can be shared with on-net connections via SMS by simply forwarding the original SMS. A second SMS to the initially contacted subscribers inform that the three most active promoters earn special gifts. Increased Risk of Revenue Cannibalization from connections 18

19 Tips for Successful Segmentation & SNA Projects Try & combine different types of segmentation in order to address your business goal in the best way. There is not a magic segmentation that will cover all aspects of a customer s relationship with the organization Always enrich segmentation with market research to gain actual customer insight & perform SWOT analysis to support your segmental strategy vs competition. Start SNA for addressing basic business objectives before moving to more sophisticated ones e.g. detection of networks with increased churn rates or low company penetration. In banking the identification of the family circle is a project of major importance. Combine SNA with Segmentation & other Business Analytics in order to strategically acquire opinion leaders of your competition and promote new products & services utilizing the Viral effect. Ask opinion leaders (of both your customers base & competition) what can motivate them to switch providers or adopt a new service/product using market research. Use test campaigns for different products & services testing different referral incentives to identify early adopters & influencers. Keep that info in your databases and decide what works best for the Viral effect. 19

20 About Customers D N A is a firm of experts specialized in applying quantitative methods to enterprises growth and optimization issues, particularly in the domains of sales, marketing and strategy. Our team combines technical as well as business experience in numerous industries aiming to bridge the gap between technology and its applications in business & strategy. provides a comprehensive and complementary range of services across CRM, Customer Intelligence, Market Research and Training. We offer a fully outsource collaboration model where encrypted data are securely transferred and analyzed in our premises. We can guarantee successful and low cost projects giving any company, looking to move its marketing to the next level, a great advantage without the need of internal investments. 20