WHO ARE THE SUPER HEROES OF YOUR BRAND? DISCOVER HOW TELCOS CAN MAXIMISE BIG DATA ASSETS APRIL 2016
10 THINGS YOU NEED TO KNOW ABOUT SUPER CONSUMERS 1 2 3 THEY RE THE SUPER HEROES OF YOUR BRAND THEY WILL EVANGELISE YOUR WORK IN PROGRESS PRODUCTS TO OTHERS THEY DRIVE THE LION'S SHARE OF YOUR PROFITS 4 THEY RE FOUND ACROSS MULTIPLE CATEGORIES INCLUDING CONSUMER PACKAGED GOODS, EDUCATION, FINANCIAL SERVICES, HEALTH CARE, MEDIA, RETAIL AND TELECOMMUNICATIONS 5 SUPER CONSUMERS OF ONE CATEGORY TEND TO BE SUPER CONSUMERS OF 9 OTHER CATEGORIES 6 THEY RE BOTH ECONOMICALLY & EMOTIONALLY INVOLVED IN THE CATEGORY 7 THEY RE HIGHLY RECEPTIVE TO INNOVATIONS AND OFFERS 8 9 10 INVOLVE SUPER CONSUMERS FROM THE START, FROM CREATING TO TESTING NEW INNOVATIONS THEY RE WILLING TO PAY A PREMIUM PRICE UNDERSTANDING THEIR MOTIVATIONS CAN PAY BACK TWOFOLD
OPPORTUNITY IS KNOCKING AT YOUR DOOR From the back streets of Jakarta to the peak-hour crush of Seoul subways, you ll see one thing in common: everyone is deeply absorbed in the mobile world. Fingers are tapping, eyes stare at the screen, deeply engaged in conversation but not with those around them. The mobile consumer is everywhere and growing exponentially. The past decade has seen unprecedented change in the telecommunications sector in Asia Pacific, and the coming years show no sign of a slowdown. The availability of smartphones, tablets, Wi-Fi, 4G networks and e-commerce is changing the way business is conducted, and driving huge-scale innovation in areas ranging from customer engagement to retail models. Although the numbers in certain Southeast Asian markets, like Indonesia and Philippines are still low, it might be a surprise to some that smartphone penetration in some parts of Asia, e.g. South Korea, Singapore significantly exceeds numbers in the so-called developed world. You d think, for a telco operator, Christmas (or Chinese New Year) had arrived! However, while voice and data services continue to grow in Asia Pacific, courtesy of the data-hungry tech-savvy consumer, competition among operators is rife, and the growing footprint of over-the-top players such as WhatsApp, Skype, Viber, LINE, and Kakao Talk is stealthily stealing traditional revenue streams of voice and SMS. Copyright 2016 The Nielsen Company 1
ON THE HUNT FOR THE MOST PROFITABLE CONSUMERS So what can telco operators in Southeast Asia do to grow in this challenging environment? In these days of big data, the most reliable first step a company facing growing competition can take is to identify their most profitable customers and leverage the power of data. But telcos hold an advantage: they sit on an untapped mine of consumer intelligence intelligence that many of their customers want them to use. A McCann study found that 49% of consumers around the world want their mobile network provider to use their data to provide them with deals and services better suited to their needs. As one respondent noted, When you go to a bar for the first time they don t know you, but the more you go the more they know about what you like the same would be desirable for a mobile network. 2 WHO ARE THE SUPER HEROES OF YOUR BRAND? APRIL 2016
MEET THE TELCO SUPER CONSUMER Depending on the market, telco customers run the gamut from those purchasing one-off pre-paid SIM cards, to those who sign up with whichever telco offers the best deal that day, to loyal, long-term consumers with data plans across several devices and services. The most promising strategy for businesses seeking incremental revenue from existing services is to target their most profitable users. Studying their existing spending patterns on current products and services can provide clues to their future potential, either persuading them to increase their existing current usage or to add more products and services. But we also recommend a second filter: consumers level of engagement with your brand. TELCOS SHOULD ASK THEMSELVES TWO CRITICAL QUESTIONS ABOUT THEIR CUSTOMERS EXISTING USAGE HOW MANY SERVICES DO THEY CURRENTLY SUBSCRIBE TO? ENGAGEMENT LEVEL DO THEY INTERACT REGULARLY WITH YOUR WEBSITE, SOCIAL MEDIA FORUMS, CALL CENTRES OR RETAIL STORES? Copyright 2016 The Nielsen Company 3
Their involvement with your brand is a clue to how passionate they are about you, and how strong an advocate they can be for you in future. It s not just a matter of making more money from them. In today s world of increasing social media, they can become ambassadors for your brand and influence other customers and potential customers. We call these consumers, super consumers. They are the subset of heavy users who are highly engaged with your brand. From other industries, we have learnt that super consumers are especially interested in innovative uses of your brand, as well as newer models and related products and services. They also aren t particularly price sensitive: What s not to like? By isolating their super consumers, telco providers can focus on a dedicated niche group likely to drive the highest long-term profitability per user. Getting to know these consumers well via customer analytics, identifying potential unmet needs (even before consumers are aware of them themselves) and ensuring the right message is sent via their preferred communication channels will greatly increase the likelihood of long term commitment. WHO ARE SUPER CONSUMERS? PROFITS HEAVY USER SUPER CONSUMERS HEAVILY ENGAGED PASSION 4 WHO ARE THE SUPER HEROES OF YOUR BRAND? APRIL 2016
How do you identify these super consumers? A simple method is to classify your users by level and direction of spend, and their level of engagement as indicated by time spent on your website (other than paying the bill or calling the help desk). HOW DO WE FIND THEM? + = DATABASE ANALYTICS MARKET RESEARCH PRECISION TARGETING A second step involves determining the extent of a customer s potential. A customer with high spend and engagement is the ideal consumer that should be retained at all costs and should be targeted with additional product offers to further endorse their loyalty. Customers with high engagement but low to medium spend should be offered services that will entice them to stretch their wallet, increasing their repertoire of services they use. Volatility refers to disloyal consumers who switch between providers offers. The key with this customer group is to convert/steady their spending across your product portfolio by leveraging different product engagement tactics (for example if the volatile customer uses international roaming, the telco may offer 10 minutes of free international roaming after 100 local minutes). HOW DO WE ENGAGE THEM? ENGAGEMENT INDEX HIGH STRETCH RETAIN MID RE-INVENT LOW RE-ENGAGE LOW MID MID-HIGH HIGH VALUE INDEX Copyright 2016 The Nielsen Company 5
JOHN: TELCO SUPER CONSUMER John has been a loyal customer with Terrific Telco for 3 years. He started by buying pre-paid SIM cards for a Samsung smartphone. Over time, however, he has upgraded regularly, signing up for multiple services, and leveraged Terrific s loyalty benefits (free international roaming, extra data, free texts, etc.) to move from his basic prepaid connection and equipment upgrades to post-paid family plans. He, along with his family, share data and minutes across multiple lines. By the time John has become a super consumer, he will be better informed and more articulate about the benefits of your products and services than your other customers. As a result, super consumers are not merely profitable, but they can become social influencers. By understanding their calling behaviours, telcos can tap into super consumers influence on both existing and non-existing customers. 6 WHO ARE THE SUPER HEROES OF YOUR BRAND? APRIL 2016
ACTIVATING SUPER CONSUMERS It s easy to reach Super Consumers, once you know who they are. But identifying the optimal strategies to change their behaviour is another matter. Nielsen has come up with a five-point plan to maximise the value of the telco Super Consumer. 2 THE RIGHT OFFER FOR THE RIGHT CONSUMER 1 HOW MUCH MORE ARE THEY WILLING TO STRETCH? Any telco super consumer is an integral part of your business today, but what does he or she have for your business tomorrow? Answering this question is the most important input into tailoring your products and services to drive incremental spend. Did an expat s international calling drop off? Perhaps they are limiting their calling to when they are within connection distance of a wireless router. Tailoring the right value-added services might persuade them to make more calls wherever they happen to be. Is the user a well-off retiree traveling abroad all the time? A discount roaming package will probably make the difference between infrequent and frequent use. The trick is to find the price point at which the incremental convenience of using the phone outweighs the cost, as assessed by the customer. Getting this right will fuel super consumers uptake of new and innovative offerings. Understanding the way super consumers use your products and services is fundamental to determining their latent needs and their likely frustrations and therefore the kinds of new offerings they haven t thought of, but will jump on if they are made available. In an industry in which annual churn continues to be a primary concern, building the consumer s product portfolio creates a stickier relationship. Understanding the data you have on the consumer data often scattered across the enterprise is crucial. Often, this requires making siloed datasets speak to each other, allowing you to stitch the data together in a way that will provide a complete view of the customer. Once you have this complete view, you can identify the segment to which the customer belongs. Predictive optimisation models can determine the optimal offer strategy that will resonate with each consumer. When we know what they want and what they are looking for, it s easy to tailor and deliver a precision offering that meets their unique needs. Copyright 2016 The Nielsen Company 7
3 MAKE SURE THEY RE HAPPY 5 KNOW HOW THEY WANT TO BE EDUCATED AND COMMUNICATED TO Predictive analysis can flag unhappy customers before they make the decision to leave. Proactively reaching out to resolve a conflict, providing an improved service offering or a tailored pricing deal can help ensure that super consumers stay and continue to grow with you not your competitors. The simple act of reaching out does a lot of the work although it s a bad sign of the state of the industry. 4 TAKE CAREFUL AND CONTINUOUS ACCOUNT OF WHERE YOUR PROFITABLE CONSUMERS ARE Telco operators know where their higher value customers cluster. They can ensure that their network coverage and their rollout of new technology is aligned to areas where more of their Super Consumers are located. Knowing where they shop and how they shop (i.e. their preferred methods of interaction) also allows telco operators to prioritise their sales and distribution network to ensure a seamless customer experience with your brand. Location analysis underpins the power of direct mobile marketing and even outdoor campaigns. That effectiveness can be especially valuable to large companies, some of which spend billions of dollars a year on advertising and for which a 1% increase in the efficiency of ad spending will therefore be worth tens of millions of dollars. Focussing your efforts on super consumers, about whom you naturally know the most, makes media planning and spend significantly more cost-efficient than targeting a broader base or a group you know less well so advertising to super consumers is likely to be cheaper as well as generate more revenue. You can know what matters to your super consumer, what platforms they use to source knowledge, and what stage they are at in the buying cycle all of which allows you to send the right message to the right customer through the right channel at the right time. Getting it right the first time might be difficult, but if you start to measure the impact you are having on this key group of consumers, you have a benchmark to improve. How successful was that marketing campaign? Did I reach the consumers I was targeting? By looking at the historical relationship between marketing spend and business performance among your super consumer base, you can determine what is and isn t working, and how much you should be investing in each product, service, market, region, and so on. SUPER CONSUMERS OF ONE CATEGORY TEND TO BE SUPER CONSUMERS OF 9 OTHER CATEGORIES 8 WHO ARE THE SUPER HEROES OF YOUR BRAND? APRIL 2016
TAILOR MARKETING CAMPAIGNS AND MESSAGING THAT TALK TO YOUR CUSTOMERS ACROSS DIFFERENT LIFE STAGES WEB OF DIMENSIONS INFLUENCING BEHAVIOUR Needs Social influences Shopping modes & styles Demographics & life stages Ingrained habits & rules Market(ing) dynamics Motivations ACQUIRE CROSS/UPSELL RETAIN SOCIAL My friends are my influencers CONVENIENCE I would like to have one provider for all my needs BUDGET-CONSCIOUS I like it with the TV subscription free ATTITUDES I feel valued with personalised messages FEATURES I like hi-speed internet on my mobile WHITESPACE OPPORTUNITIES EXTEND BEYOND JUST NEEDS OR MOTIVATIONS A final note might hold the most profit of all. Research from Nielsen s Cambridge group has found that super consumers of one category tend to be super consumers of nine other categories. So, when looking for super consumers, don t restrict yourself to considering just your own best customers. In today s world of big data analytics, we can identify those people who d love to buy your product, as well as those people who are already deeply engaged with a seemingly unrelated product all stitched together under a singular and powerful emotional benefit. Any individual you can identify as a super consumer of, say, three or four non-telco products is a good candidate for becoming a super consumer of yours. Activating against this group of new consumers can be the key to unlocking a layer of growth that might otherwise remain elusive. Copyright 2016 The Nielsen Company 9
ABOUT OUR AUTHORS SAGAR TAMANG MANAGING DIRECTOR, TECHNOLOGY AND FINANCIAL INDUSTRY GROUP, SOUTHEAST ASIA, NORTH ASIA, PACIFIC NIELSEN KEYA MUKHERJEE ASSOCIATE DIRECTOR, ANALYTIC CONSULTING, SOUTHEAST ASIA, NORTH ASIA, PACIFIC NIELSEN NICOLE CORBETT DIRECTOR, THOUGHT LEADERSHIP AND KNOWLEDGE MANAGEMENT, SOUTHEAST ASIA, NORTH ASIA, PACIFIC NIELSEN ABOUT NIELSEN Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers Watch and Buy. Nielsen s Watch segment provides media and advertising clients with Total Audience measurement services across all devices where content video, audio and text is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen provides its clients with both world-class measurement as well as analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the world s population. For more information, visit www.nielsen.com/apac. Copyright 2016 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service names are trademarks or registered trademarks of their respective companies. 16/9823