Customer Own Content Development &

Application Tools as Added Value for

Retention

Petru FUIOREA

ROL.RO

What almost any Provider knows

• An ISP Customer base:

• Increases by Adds• Decreases by Churn

• Main Churn reasons:

• Perceived Price• Perceived Customer Care• Perceived VAS• Note: from Customer perspective

Usual Retention approach

• Focused on:• Increasing product parameters• Decreasing price• Bundling with black boxes

Downfall of Usual Model

• ‘Nice, since all customers have 100Mbps, now is time to invest to provide them 1Gbps !’

• Nope, not nice at all. Customer perception will be marginally influenced. And this with significant cost for ISP.

• Our comment• Is nice indeed to provide more than what is expected, but

bottlenecks remain, so the Customer will continue to feel the low speed determined by source regardless of its bandwidth. However, as for any upgrade, Providers may have a good time spending…

Downfall of Usual Model

• ‘Good, at this moment all customers are paying just about the cost, now is time to invest to reduce the price furthermore!’

• Nope, not good at all. Is like you are paying customer for using your service. And you are not an ONG.

• Our comment:• Changing cost model not necessary implies Cost

Reduction. Investments determine a Cost Reduction only if manage to reduce OPEX in such way that the operation is a driver for Cost Reduction.

Downfall of Usual Model

• ‘Look at these nice lap-tops. Will be cute to give one to each of our customers to build their loyalty!’

• Nope, is not cute at all. In fact is awful for perception in mid and long term unless you decided to repeat the action each and every year. At least try do it on X-mas, so you’ll contribute in keeping alive Santa Klaus story.

• Our comment• These black-boxes increase the cost and raise Risks, which

are very often wrongly mitigated. It is indeed mainly used, especially in mobile market. Is just that it develops a ‘Thanksgiving Day’ behavior among customers, with the downsides it brings.

Downfall of Usual Model

• Simple arithmetic on customer base and operations:• Adds-Churn = increase, if positive; decrease if negative;

conservation if close to null. • Complicate the simple arithmetic, considering

Operations:• Adds*SAC+Churn*AMPU = EBITDA diminishing.• Complicate furthermore, considering a saturated and

price sensitive market:• SAC increases, ARPU decreases.

• Bottom-line: Not sustainable model in mid and long term. Continuously increase of SAC and Churn drives the operations into unprofitable area

An Alternative

• Provide Value Added to your ‘connectivity’ services• Be sure this Value Added is so perceived by your

customers• Make this Value Added hard to be replaced or copied• Ensure a marginal cost for bringing this Value Added• Consider Premium versions as revenue generating VAS

Or, in other words:• Make your customers to use harbored Provider

applications • Make your customers contribute with content in

sheltered users community net [Provider own net]

Let’s see a Study Case

Study Case – What we found

• Internet Access customer base: 240k• Mobile customer base: 220k• Churn Rate, Internet Access: 5%• Churn Rate, Mobile: 5%• Internet Access penetration: 11%• Mobile penetration: 102%• ARPU Internet Access: 9Euro• ARPU Mobile: 2.5Euro• Usual Retention Model implemented on both SADs

• For reference – Moldtelecom, EoH1 2011. • Figures in +/- 10% range

Study Case – What we suggested

•An Interactive Platform

•For reference: see my.moldtelecom.md

Study Case – What was implemented

• Interactive Platform for Internet Access customers, as Added Value

•Videoconferinta•Felicitari. [Specific local: Sf. Maria, Sf. Paraschiva, Estivale]•WEBGAMES [Specific local: Acţiune, Shooting, Logice]•LocalTUBE•Divertisment•Muzica•WEBMAIL•FREEHOSTING•FILESHARING•STREAMING

Study Case – The Results

• After 2 years, EoP data

• On Products with Interactivity implemented:• Churn Rate: under 0.5%• ARPU: 9.6Euro

• On Products w/o Interactivity implemented:• Churn rate: 5.5%• ARPU: 1,5Euro

So? What a Provider may do?

• Do you need to diminish the CR? If Yes, continue, else wait patiently the end of presentation.

• Is the Usual Model suited for you? If Yes wait patiently the end of presentation, else continue.

• Do you have your Customer base segmented? If No, do it as soon as possible.

• Does the segmentation consider customer interests too? Like habits, traditions, lifestyle, aso. If No, is time to consider it.

• Do you know what are reasons for the Churn you are dealing with? If No, is time to understand them.

• Does your company offer Added Value? And what you named Added Value is it a differentiator? Do customers perceive it as you think it is? If answer is Yes, please wait patiently the end of the presentation.

So? What a Provider may do?

• ELSE: Perhaps is time to Add Value, to build Loyalty, to Influence Customer Perception. Let them create a community. Let them consider your company’s services as NOT TO BE REPLACED

ROL.RO - White Label Products

• MAIN WLPs

• Community PORTAL• WEB HOSTING• VPS for B2B, B2C• FileSharing• Streaming• Storage

• All with necessary applications as well

Available Solutions – as White Label

• B2C• B2B• Online Social Marketing campaign

Will be those successful ?

• Yes, in case of correct implementation and manifested interest from Provider’s management

• No, in case of limited or imbalanced implementation or limited interest from Provider’s management

I give it a GO. What next?

• Well, is very, very simple

• Step 1: Let us know you are interested. By mail, phone, a.s.o.

• Step 2: Be prepared for a deep and fair talk. • Step 3: Implement what we, together, decided to do

Thank you for interest or patience

• CONTACT DETAILS

• ROL.RO• www.rol.ro• office@rol.ro• petru.fuiorea@rol.com.ro• +40 735 300 475

• Or please pick-up or let a Business Card