Transcript MTS uses analytics to

MTS uses analytics to reduce churn and provide real-time offers
CASE STUDY
MTS USES ANALYTICS TO REDUCE CHURN AND PROVIDE
REAL-TIME OFFERS
JUSTIN VAN DER LANDE
analysysmason.com
© Analysys Mason Limited 2015
MTS uses analytics to reduce churn and provide real-time offers
Executive summary
Figure 1: Real-time analytics delivers better retention rates for MTS India
MTS India needed to improve customer experience and drive up
their customer retention. Utilising real-time analytics tools MTS
were able to not only provide highly tailored offers to customers,
but provide more contextualised offers within a few hours of
receiving live data.
MTS India invested in a real-time analytics solution to influence
customer decisions though their Mbonus loyalty scheme. The
scheme provides the ability to offer incentives to retain customers
though extra minutes or data in their packages. These “surprise”
bonus are created and delivered to individual subscribers who
may have been at risk of leaving.
Conversion rates of 6.5%,
delighted customers and
better retention rates
Decisions on the bonus are based on live usage data, which
requires the processing of large data sets every 30 minutes. The
ability to do this was limited by MTS’ computing power and
analytics tool, which although effective was unable to react in a
timely enough manner.
Poor conversion rates of
less than 3%. Poor
customer retention
The additional change was to remove the need to have IT staff run
the queries on the data, a process that often led to delays in
creating and executing marketing campaigns. Market staff were
given access to SAS Market Automations software which enabled
them to perform campaign management tasks themselves.
The conversion rates from campaigns have more than doubled to
6.5%, providing MTS with potential advantage over other CSPs in
the Indian market, where conversion rates are nearer 3%.
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Source: Analysys Mason
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MTS uses analytics to reduce churn and provide real-time offers
Business environment: India’s educated and price sensitive subscribers
frequently churn between operators made simple by using multiple SIMS
Figure 2: Significant churn rated need reducing to grow the business
Despite the on-going growth of smartphone and mobile data takeup within the Indian markets, operators are faced with significant
churn rates, these can average as high as 6% per month in some
mobile operators circles.
Acquire
Most subscribers are on pre-paid tariff or only are post-paid for
short contracts of three months or less. The ability for the
operators to influence their subscribers is very limited unlike in
other markets where there is a much high percentage of post-paid
subscribers with multi-year contracts.
The toxic combination of competitive services and the inability to
properly understand subscribers requirements means that only
broad marketing methods can be used which are not targeted to
individuals. Which in turn does not provide enough incentive or
focus to encourage subscribers to renew or top-up with the
operator.
Renew
As a result a number of operators have been push-out of business
and others have run up financial losses attempting to provide
competitive offerings to subscribers.
Customer
lifecycle
Support
Churn
6%
per month
Churn rates therefore need to be reduced in order to CPS to create
sustainable businesses and build up subscribers numbers.
Source: Analysys Mason
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MTS uses analytics to reduce churn and provide real-time offers
MTS India: reduces churn by addressing retention issues through the use
of real-time analytics with usage data.
Figure 3: Step into using analytics to retain customers
MTS is based in New Delhi, India, and is a division of the Russianbased telecommunications company Sistema Shyam TeleServices
Ltd (SSTL), serving approximately 9.1 million mobile phone
customers on the Indian subcontinent as of the end of 2014.
MTS India’s coverage is able to address about 40% of the Indian
population. Revenues were Inr 12,452 million in 2014. The Indian
market is highly competitive with an increasingly proliferation of
smartphones, helped by significant price falls in 2014. About 4.8
million new subscribers are added each month on wireless
networks.
Real-time
aware
Device
aware
Channel
aware
The telecoms sector is very competitive with only five years ago
their being over 12 providers per circle in India. After a series of
bandwidth auctions there are often eight to 10 providers in each
circle. Often subscribers subscriber with two or more operators
driving penetration rates near to 70%, but this increases to over
100% in many metro circles. Subscribers easily churn from one
operator to the next, giving marketing teams very little time to
engage with customers to improve retention levels.
Context
aware
Using real-time data
to provide timely
communications
Using real-time data
to dynamically refine
offer or services with
customers
understanding the
format and type of
communications to a
customer is required
understand how to best
reach a customer
MTS India decided to invest in a competitive data analytics
solutions to help retain existing customers and encourage
increased usage of its mobile and broadband services. The
system uses real-time usage information to trigger offers and
loyalty activity to retain customers
time
Source: Analysys Mason
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MTS uses analytics to reduce churn and provide real-time offers
Business challenge: Real-time analytics solutions enables operators to
analyse usage data as it happens and provide instant relevant offers
Figure 4: Mbonus offers in MTS India
MTS wanted to create relevant offers to their customer based on
their usage information and serve them an offer that had been
tailored to the individual while they were still on-line.
In the past , like other providers, MTS had been using rudimentary
batch processing of data for campaign management. The fastest
that this was run was 24 hours between receiving the data and
creating new offers. This time lag in utilising the data was
impacting the effectiveness of the market campaigns.
Extra SMS
Entertainment vouchers
Free caller tunes
Extra talktime
The growth in data due to the increasing numbers of potential
sources coupled with its sheer volume made older data
warehousing technology in-adequate. In addition data analysis
tools for data mining and subsequent business intelligence were
not supporting the business requirements. MTS had already
adopted the concepts of analytics earlier than some of their
competition. MTS uses the analytics platform to gain customer
insights for improving service, and quality of products and
services, as well as generating up-selling and cross-selling
opportunities. However the ability to incorporate this data in realtime and provide more timely insights and campaigns was still
needed.
Handset-upgrades
MBonus Scheme MTS India
MTS implemented a loyalty scheme “MBonus” that can
dynamically create individual offers for each subscriber based on
their usage data.
Source: Analysys Mason
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MTS uses analytics to reduce churn and provide real-time offers
Solution approach: Using easy to use tools enabled non-technical
business staff to do in-depth analysis, removing an IT bottle-neck
Figure 5: Context aware marketing builds on key marketing and data systems
MTS approach was to build on their current analytics capability to
enable them to use big data techniques.
Marketing campaigns needed to be created within the hour not in
days, this required the avoidance of business users relying on IT
departments to run segmentation and other reports on their
behalf. In the past, where the analysis was performed by requests
to the IT department from marketing groups there was an
inevitable delay as queries were handed over by marketing teams
to IT and then later refined after the results were given back to
them. This staff bottle-neck needed to be eliminated. The aim was
to provide marketing and business staff with better tools that
enabled them to do the data queries themselves. This enables
more resources to be deployed in reacting quickly to creating and
executing campaigns.
Increased
Revenue
Context
aware
marketing
MTS needed to rely on an applications based approach to ensured
a robust, quick to install solution that could be easily supported by
a vendor and staff.
Campaign
management
Offer creation
The ability to refine campaigns through the use of configuration of
the tools, without heavy engineering requirements ensured a lower
operations cost. It also ensures the platform can be refined to
support new campaigns and business requirements in the future
by business staff.
Subscriber
Insights
Subscriber
segmentation
Static data
Big data
Realtime data
Source: Analysys Mason
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MTS uses analytics to reduce churn and provide real-time offers
Implementation details: HP Vertica and SAS market automation combine
to provide MTS with a real-time capable solution for marketing
Figure 6: Solution architecture for HP and SAS solutions.
MTS considered a number of vendors and its IT team helped
vendors set up a proof-of-concept for each one, allowing one week
for each solution under consideration.
SAS Institute
Marketing Automation
Tests were done in breaking down all the relevant information
sources that marketing teams could use and processing of data to
allow for campaign to reach out to the customer, almost when
subscribes were still online in real-time.
MTS utilised a columnar database from HP Vertica. That was
able to load data at 2 gigabits per second from the many different
data sources the MTS has. The campaign management was
performed by SAS® Marketing Automation that provided MTS
marketers with an easy to use solution to plan, test and run
marketing campaigns. Enabling business users to drive subscriber
segmentation, create offers and manage campaigns.
HP Vetica Database
MTS group in Russia and CIS also use the same campaign
management tool, enabling some skills to be interchanged across
the group.
HP Big Data analytics engine was implemented on HP own
hardware platform that has been tune to perform a non-stop fault
tolerant configuration 24 hours a day 7 days a week.
Source: Analysys Mason
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MTS uses analytics to reduce churn and provide real-time offers
Benefits achieved over a doubling of conversation rates while running the
solution
Figure 7: Relevant diagram if available
The analytics platform has empowered business teams to create
campaigns with minimal or no IT intervention, ensuring
significantly lower turnaround time and market differentiation.
Today, the MBonus platform renders approximately 600 voice and
data marketing campaigns a day.
“By rewarding new or recently upgraded
customers with surprise bonuses in the form
of extra minutes or additional data, we have
more than doubled our conversion rate,
from an industry average of 3% to an
unprecedented 6.5%. No one else in our
marketplace is achieving these numbers.”
This has been coupled with a higher conversion rate for marketing
campaigns. The standard telco industry conversion rate in India is
3%. With the new solution this has increased to approximately
6.5%.
This is a significant change for MTS almost doubling the
conversion rates that it use to run. This provides MTS the growth
in the marketplace to help grow their business in the highly
competitive Indian market place.
In practical terms If you are a high-paying telecom subscriber of
MTS, you could be also be receiving preferential treatment on your
network. If you have a reason to call in to a call centre your waiting
time your wait and response could be also shorter than others and
your bandwidth could be better than the person who is paying only
an average amount for their services on the same network. These
service offering can be targeted at very small segments of the
market and help to improve customer retention as push up ARPU
for subscribers.
Rajeev Batra, CIO, MTS India Telecom*
Source: Analysys Mason
*Quote from HP Case Study on MTS
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MTS uses analytics to reduce churn and provide real-time offers
About the author
Justin leads the Analytics Software Strategies, Customer Experience Management Software Strategies and CSP IT Strategies research
programmes, which are part of Analysys Mason's Telecoms Software research stream. He specialises in business intelligence and
analytics tools, the functionality of which cuts across all of the research programmes in this area. He also provides project management
for large-scale projects within our Telecoms Software research. Justin has more than 20 years' experience in the communications industry
in software development, marketing and research. He has held senior positions at NCR/AT&T, Micromuse (IBM), Granite Systems
(Telcordia) and at the TM Forum. Justin holds a BSc in Management Science and Computer Studies from the University of Wales..
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MTS uses analytics to reduce churn and provide real-time offers
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MTS uses analytics to reduce churn and provide real-time offers
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