Xtract Proposes Recession Action Plan for Operators

Xtract, which provides 3D profiling techniques to analyse subscribers' demographic and behavioural data, has produced a five-point recession action plan for mobile operators in 2009:
While mobile operators are perhaps not among the worst hit businesses, the company notes that subscribers may put off a phone upgrade and will perhaps be less likely to try out new services, reducing their call and texting volumes to save cash. In this climate, says Xtract, major mobile operators 2009 business strategies should involve a combination of five goals:

     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, says Xtract, 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. If handled cleverly, the company believes that innovations in marketing can offer the best return on investment for operators in the current economic climate.

So here is Xtracts take on what mobile operators need to do in 2009

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 the 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 costs 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 costs in non-core areas
In 2009, operators will need to demonstrate to investors the ability to cut costs 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.

In conclusion, although it will be tough out there, operators could do worse than to shake up their marketing techniques in 2009, says Xtract Chief Strategy Officer, Jouko Ahvenainen. 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.