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segment to boost loyalty
Increase customer value, decrease churn, develop customer loyalty, all operators are concerned about these issues. Rewarding programmes seem to be the main answer.
According to F. Reichheld (The loyalty effect, the hidden force behind growth, profits and lasting value), a 5% increase in the loyalty rate could increase profit by 25 to 85% according to business activities. In emerging countries, where most people use prepaid offers, churn is high. In some countries, such as South Africa, attrition can exceed 30%.
Rewarding customer loyalty by granting specific privileges is a first
answer but a clear commitment and a quality of service the customer
can appreciate could be relevant and complete the customer retention
and rewarding plans. Loyalty remains to be valued!
The multiplicity of promotional offers, loyalty bonuses, free gifts… a necessary evil! Operators seem to privilege this solution to attract customers. But does it really work on loyalty?
Effective to reduce churn or boost uses when they are exclusive and/ or open to customers, promotional offers can, on the other hand, generate “in-house churn” for the operator when they are oriented towards capturing new customers. Surfing on regular events (mother’s day, beginning of school year, religious celebrations, etc.) to create specific offers, offering discounts on favourite numbers or granting communication bonuses at top-up are some of the “formulas” that can attract price-oriented customers.
More segmented offers answering a specific target or need are solutions that go far beyond the price only strategy
Customers judge their operator by the relevance of the offer and on the feeling that it recognises their status as a teenager, young professional, business man, etc. So, for instance the “M6 Mobile by Orange range” with its youngster-oriented value proposition or the “MTN XtraConnect for families or for professionals” offers propose targeted offers in line with that strategy.
Therefore, segmentation enables to partly avoid the competition spiral; it creates more customized loyalty programmes and allocate financial resources according to the value and importance granted to each segment.
Both loyalty policies and uses stimulation are centred on customer’s needs understanding
The inventory of customer expectancies together with behaviour analyses, such as consumption management, frequency of requests to customer service, type of services subscribed to, are elements that can be used to segment the customer database.
Segmentation allows relational marketing. A relation can occur only when the other party is known beforehand. Thus, customers can be addressed with a commitment, more customized offers and a preset investment level. The only thing left is to hire experts in “datamining” analysis, and get the necessary tools for data storage and statistics running.
But let’s not forget that the quality of the welcome at a point-of-sales,
the relevance of an answer from a call-centre and the process fluidity
do remain the basis of the relationship.
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