Recession plan for mobile operators

Xtract, provider of the most innovative 3D profiling techniques on the market to analyse subscribers’ demographic and behavioural data, as well as social networking behaviours, has produced a five-point action plan for operators in 2009.

While mobile operators are perhaps not the worst hit businesses by the recession, subscribers may put off a phone upgrade and perhaps will be less likely to try out new services, reducing their call and texting volumes to save cash, said Xtract. In this climate, 2009’s business strategies for all major mobile operators will involve some combination of five goals, the company claimed: Keep existing customers and revenue; Increase efficiency; Cut cost in non-core functions; Increase ARPU with proven solutions; Look for new revenue streams.

Almost certainly operators will be looking to reduce expenditure on network and IT costs, but spending on areas such as marketing and advertising in 2009 is less easy to predict, claimed the business. If handled cleverly, innovations in marketing can offer the best return on investment for operators in this economy, Xtract stated.

The five point plan consists of: 1. Keep subscribers through innovative churn management. Churn is such an endemic issue that most operators view it as business as usual, but those that can reduce churn through the recession will invariably win out. Clever churn management involves viewing churn as the viral, social problem that it is, using analytics to identify customers most likely to churn, and those most likely to influence others in their network to leave with them. By focusing viral churn management marketing campaigns on keeping these highly influential churners, operators can beat this cycle.

2. Increase efficiency with more effective marketing campaigns If ARPU remains stagnant operators must find ways of reducing cost to maintain profitability levels. By introducing more effective, targeted marketing, operators can find cost savings from within. This means getting to know the subscriber better through 3D profiling techniques and having a more complete picture of whom they are selling to.

3. Cut cost in non-core areas. In 2009 operators will need to demonstrate to investors the ability to cut cost in non-core functions. Reducing both capital and operating expenditure on data mining and analysis will be critical; this may be achieved through using more innovative software as a service analytics tools rather than less cutting edge internal IT functions.

4. Increase ARPU with proven solutions. If consumers will be less likely to try out new services, solutions pushed to them in 2009 must be highly compelling, viral and likely to generate word of mouth interest. Operators need to review cash cows of the past and decide which services to market to which micro segments for improved campaign pick up.

5. Look for new revenue streams. Operators are sitting on the largest social networks in the world often without realising it. By engaging in analytical subscriber profiling, operators can mine data from their subscribers for market research that marketing and advertising agencies need and want, selling this data on and in turn creating more compelling, personal, relevant propositions for subscribers.

Jouko Ahvenainen, co-founder and chief strategy officer at Xtract, commented: “In conclusion, although it will be tough out there, operators could do worse than to shake up their marketing techniques in 2009. With expenditure focused on areas of the business that provide real ROI, the operators who come out on top from this recession will be those that utilise advanced marketing technologies in new, innovative ways.”

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