A-new-approach-to-telecom-digital-marketing

It provides an immediate and complete picture of customers’ online activity, enabling CSPs to use relevant and realtime information to improve services, deepen engagement with existing c

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A new approach to telecom digital marketing:

Effectively engage, retain and monetize

subscribers

Publication Date: 21 Jul 2014 | Product code: IT0024-000093

Clare McCarthy

Summary

Catalyst

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New Methods for CSPs to Engage and Monetize

Using data to create and monetize new offers or improve performance and customer engagement has been a focus for communications service providers (CSPs) in the last few years CSPs have huge data repositories at a network, operational, service, application, and customer level, and use analytics suites to obtain actionable insights for the business However, DNS data or Internet activity data is yet

to come under the microscope, despite the benefits it can deliver

With the Internet-of-Things (IoT) integral to the digital lifestyle, leveraging Internet activity data from the DNS resonates with the needs of CSPs It provides an immediate and complete picture of

customers’ online activity, enabling CSPs to use relevant and realtime information to improve

services, deepen engagement with existing customers, protect customers from malware, provide timely and personalized offers, and enhance customers’ digital lifestyles

This report looks at the benefits CSPs can derive from using analytics tools to leverage DNS data on

a digital marketing platform, to provide proactive customer engagement and targeted monetization Ovum view

CSPs continue to invest in analytics solutions to improve efficiency and business decision-making, provide personalized telecoms services, and exploit B2B and B2B2C opportunities However, these efforts may not achieve their full potential if CSPs continue to rely on historical and often static data for insights into customer behavior Analyzing various types of data within the CSP domain is not a new activity, but using the ubiquitous DNS data is new and has several advantages over other data sources

Realtime access to customers' activities and the ability to respond is a rare but extremely powerful way of engaging with customers As more customers’ activities go online, CSPs need to provide solutions that keep pace with their customers’ digital lifestyles, and engage with customers to protect them online and provide them with appropriate applications, services, and support in the moment that they need it

Key messages

§ The DNS sees every Internet query made by the customer all of the time, so by using DNS or Internet activity data analytics CSPs can better understand their subscribers’ online

preferences This capability helps the CSP to obtain a realtime, end-to-end process view of its customers’ activities, and develop more relevant customer engagements with its existing customer base This is not something that OTT players can achieve

§ With more of customers’ activities going online, CSPs need to keep pace with the digital domain and respond in session DNS-based analytics can provide realtime insights as the basis for more secure Internet usage, higher retention, and higher conversion rates for marketing campaigns (versus those using historical data), and for more personalized and accurate

interactions with care agents

§ As part of the ongoing customer engagement, CSPs can use the all-encompassing nature of their customers’ Internet (DNS) activity data to drive cross-sell and upsell opportunities to

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niche customer segments for their own offers, as well as for the benefit of third-party

advertising and other two-sided business models

§ Few companies are dedicated to leveraging Internet data activity data from the DNS, but Nominum has a compelling story These activities compete with and are complementary to the more established deep packet inspection (DPI), business intelligence (BI), and Big Data analytics (BDA) activities

Market overview

Market trends

In today’s mature telecommunications markets, retaining a loyal customer base should be a more important activity than winning new customers However, this is rarely the case Although CSPs’ customer acquisition costs can outstrip retention costs by four to one, CSPs seems to favor new customers through special offers and better treatment, while neglecting existing loyal customers Some might argue that CSPs have made a conscious choice to rely on lethargy to keep a core

customer base, but CSPs also struggle to do better because they lack the tools to identify the tipping point for loyalty and churn

CSPs are not short of information sources to help them understand their customers However, in their attempts to collate and analyze subscriber data, they risk being a step behind their customers

throughout the engagement cycle CSPs’ data warehouses are full of historical data about customers and the websites they visited, but search analytics only sees the customer search data on one search engine at a time, and web analytics only sees customer activity one website at a time There is no complete or realtime view

CSPs can achieve this by using Internet activity data sourced from the DNS DNS is an asset that all operators have access to, but one that few have considered leveraging The DNS sees every Internet query made by the customer, so DNS analytics give CSPs an end-to-end process view that shows the sequence of events in real time

The DNS is often referred to as the Internet phone book, as it translates host names into IP

addresses, while dynamic host configuration protocol (DHCP) is the networking protocol used to administer information for IP networks, including the dynamic configuration of IP addresses To provide some context to the ubiquity of this data, Nominum, a vendor leveraging DNS data, claims to process 1.5 trillion DNS queries each day – Google+ processes 3.3 billion searches, while there are 2.7 billion Facebook "likes" and 600 million Tweets per day By managing the flows of DNS activity data, CSPs can develop an early warning system against DNS DDoS amplification attacks, and identify propensity to churn, purchase new services, or change device

The amount of data carried over CSP networks and the devices connected to those networks is increasing exponentially, so effective consolidation and centralization of cross-domain CSP

information is a prerequisite for analytic success DNS activity data plays an increasingly important

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role in the Internet of Things As the number of IP addresses and IP traffic grows, CSPs will need to secure and develop new services to support the digital lifestyle

As shown in Figure 1, smart devices are becoming pervasive and will increase the use of digital channels in business and social life for browsing, search, discovery, and transactions

Customers will conduct more frequent online transactions in the future, and CSPs need to be able to engage at these touchpoints to assure secure transactions They can then collect, collate, and

analyze customer data to improve their outbound service delivery to customers Therefore, it is critical that they are able to more readily access and act on that data

Competitive vendor landscape

DNS analytics crosses deep packet inspection (DPI) and Big Data analytics (BDA) competences As a result, the vendor landscape includes DPI players Sandvine and Allot, niche players such as Arbor Networks, and BDA companies such as IBM, HP, Oracle Siebel, and Salesforce.com, who feature strongly in the areas of customer and marketing data

Compared to DPI, the DNS analytics offerings we have seen, from Nominum for example, are light, simple to deploy, and do not require heavy technical implementation DPI is more likely to be sold in

to the CTO and CIO offices, while the applications for DNS analytics can be used standalone by sales, marketing, and care teams to help with retention and loyalty programs, as well as with new service offers These solutions do not require integration with the operator’s network or systems and platforms However, if the implementation occurs under the CTO/CIO remit, then the applications can

be integrated with the operator’s Big Data platforms or CEM systems

Telco pain points

Figure 1: Smartphones, tablets, and PCs by software platform provider

Source: Ovum

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Telcos' margins remain under pressure as revenue growth slows Capex remains around 15–20% as telcos invest in their network and IT infrastructure to optimize existing estates and automate and improve customer experience systems Improving customer experience management, in its widest

sense, is a powerful corporate driver (see Figure 2), and it informs business and IT investments for

To gain parity with the agility and personalized services offered by over-the-top (OTT) players, CSPs need to deploy predictive and contextually aware systems and analytics to improve the customer experience at critical digital touchpoints (see Figure 3) When one considers the digital noise that occurs in customers’ work and social space, CSPs need to ensure that their customers do not just

hear, but also listen to what they have on offer The listening only comes when the CSP is proactively

network and IT departments, as well as customer-facing business units, and marketing and sales

Figure 2: What are your drivers for telco IT investments?

Source: Ovum ICT Enterprise Insights: Global Telecoms, n= 450

pushing out relevant and personalized support and offers, at the right point in time

Figure 3: CSP–customer touchpoints in the digital lifestyle

Source: Ovum

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When customers’ activities are online, the CSP needs to keep pace with their digital life and respond

in session in real time For example, when a customer is at the search and discovery phase, CSPs can direct them to new or appropriate services and offers online If the customer then starts to

navigate away from the CSP’s website, they can be targeted with in-browser messaging and/or relevant propositions and promotions based on new next best offers, actions, or price plans This could lead to a smooth acquisition, onboarding, and provisioning process, and will provide greater assurance that the customer profile will be accurate at the point of activation

Business benefits for CSPs

Remain in the past or move to the moment

In their attempts to collate and analyze subscriber data, CSPs risk being a step behind their

customers throughout the engagement cycle CSPs’ data warehouses are full of historical data about the customer and the websites they have visited, but this process does not bring together the

sequence of events, nor will it do so in real time DNS data can remedy this situation and provide CSPs with subscribers’ "live" Internet activities, allowing the CSP to send upgrade messages as soon

a customer navigates to a "trigger." Triggers include:

§ competitor websites or online

communities

§ network coverage and speed-test sites

price comparison websites new

devices reviews

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If the customer views any of these sites, the CSP can launch its churn management or win-back

campaign to ensure that the customer renews or upgrades their contract Figure 4 provides use case

The current competitive environment is leading many CSPs to explore alternative revenue sources and increase their market penetration by creating and selling more services to existing users A variety of analytics can be used to help operators monetize services that they already provide to customers At a network level, Internet activity data can be used to optimize network and service performance, but much of the power that Internet activity data can deliver is in supporting customers and marketing use cases (B2C, B2B, and B2B2C)

Network data

CSPs collect data on network availability, utilization, latency, call setup times, and the inter-exchange

of data at operator peering points CSPs can see what applications a customer is using and what websites they are browsing, and can conduct clickstream analysis

By monitoring suspicious DNS activity, an analytics solution can ensure secure transactions If it detects a botnet repeatedly contacting command and control functions in the network, or the activity originating from blacklisted sites, the CSP can use in-browser messaging to alert the customer and get them to block the attack The CSP can then choose to route the customer to anti-virus software immediately, and provide a coupon for the software

Customer data

The customer profile is built on behavioral analysis of calling and search patterns, click-through rates, billing data, presence, and support requests combined with a customer’s personal information, such

as demographics, socio-economic influences, and preferences for sports, music, film, and drama, as well as location data Customer data plays a key role in managing churn and customer care For example, in the US, Comcast was able to identify which customers in specific states were accessing

examples that CSPs can address by analyzing DNS Internet activity data

Figure 4: CSP use cases for Big Data analytics, by domain

Source: Ovum

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websites for country and western music Comcast then used this information to identify who to target with its Country and Western music TV station

On average, it costs four times as much to acquire a new customer as it does to retain an existing customer, but with annual churn rates averaging 25% in some mature markets, clearly not enough is being done to retain customers In a recent Ovum survey, only 27% of CSPs claimed to have fully deployed customer analytics, and only 23% of CSPs claimed to have implemented a predictive analytics capability within the business as a whole A lack of predictive insights will curtail any attempt

to move customer engagement to the next level However, if the CSP can see immediately that a customer has visited price-comparison websites, reviewed new devices, or looked at competitor websites, and the customer has been looking at these types of websites over the last three months, the CSP can conclude that the customer is considering churning, and act to retain the customer if that

is the appropriate action

Proactive customer engagement should begin at the search and discovery phase, as customers investigate the best offer, and again during the order to activate process For example, if a customer

is trying to sign up for a new service and has issues, and they have already investigated the

frequently asked questions or tried the online community for help and failed, then they should be offered online chat before they call the contact center Another perennial favorite to avoid is allowing the customer to fill in all their details online, only to find that the application cannot be processed or the service is unavailable It is far better to have an in-browser message alerting them to any issues immediately If service delivery and support channels are integrated, a care agent can call them to process their request when the service is available

Marketing data

B2B opportunities

At a marketing level, specialized teams can evaluate DNS analytics in light of customers' profiles, and assess customers’ propensity to buy certain products based on their online behavior They can then proactively push a personalized offer This could be an SMS or email, but it is more interactive to use in-browser messaging via a floating watermark as they search the portal or website In-browser messaging is a new digital channel that will give them the option to click to accept the offer and move

to the next stage in real time If they call a live agent, the customer service agent (CSA) will have

"next best offer" recommendations prepared for that specific customer However, this approach will only succeed if CSPs share, synchronize, and update customer information across all of their

channels, and success will be heightened if they use realtime rather than historical data as the basis

of the decision

CSPs can use the complete customer activity log to drive offers to coincide with annual events, such

as birthdays, holidays, or sporting events, or by responding with specific offers for an interest, holiday destination, or sport, for example

B2B2C opportunities

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Once customer data has been extracted and analyzed, CSPs can offer third parties similar insights However, CSPs must manage personal and data privacy issues by aggregating and anonymizing customer data CSPs cannot make money from reselling raw personal data This means that third parties will be able to see data on how groups of customers displaying similar characteristics (for example socio-economic or age groups) behave in certain conditions, but they would not be able to see an individual's personal information

The differentiating feature of analytics for DNS data is that CSPs obtain access to all customer and search activity data in real time, enabling them to react in real time in a very personalized way For

example, using in-browser messaging via a floating watermark enables CSPs to provide a realtime

As shown in Figure 5, using in-browser messaging represents one of the best channels to market for customer reach, realtime intervention, interactivity, high conversion rates, and low costs In addition,

as DNS Internet activity data is inherent in every CSP’s domain, they do not have to buy new prospect lists, pay postage for direct mail, or buy TV airtime in order to reach their target market Insight and responses will be based on a realtime and personalized experience rather than historical data Ultimately, this should provide better conversion rates for marketing activities, and a rather swift return

on investment for analytics suites The key is to ensure that once this data is available, CSPs make it

as simple as possible for customers to respond or sign up and start using the new service in real time While this type of analytics suite can be deployed standalone, CSPs should ensure that these insights

do not become stranded assets in one department, and that their benefit is shared with other IT platforms and systems

and interactive response to customers

Figure 5: Effectiveness of marketing channels in customer engagement

Source: Ovum

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Using DNS data as the data source

Business value from realtime insights and interaction

While the use cases described above are not new, using DNS data as the data source is new We noted some interesting examples that show demonstrable business value from realtime insights and interaction, and costs are lower compared to other analytics solutions

Security

Ovum sees great potential for CSPs to build customer loyalty and trust in managing secure online activity and transactions Subscriber safety and empowerment, or parental controls, are increasingly important to users If CSPs’ marketing departments promote offers that link to third-party sites, they should know whether it is a secure and protected site Typically, this is a blind spot for CSPs’

marketing departments, who are not well informed on malware issues or how to avoid or treat them With more activities occurring online via a wider array of devices, there is always a danger that

malware or botnet attacks will compromise the integrity of the customers’ domain As shown in Figure

6, creating a protected environment that proactively detects and resolves customer issues, before they become toxic, is extremely important For customers that are not tech savvy, this kind of support will be key in retaining their business The same parameters can be applied to ensure that

inappropriate or harmful content does not reach children and minors, for example

For CSPs, monitoring DNS activity data will help to identify botnet activity in real time, allowing them

to protect and respond in real time at a system level, as well as push out in-session browser

messages to ensure customers also help to protect themselves

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