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July 2011

Social Networking for Telecoms: How To Enlist Friends and Family as Mobile Marketers

Social Networking for Telecoms: How To Enlist Friends and Family as Mobile Marketers

“Wealth — Any income that is at least $100 more a year than the income of one’s wife’s sister’s husband.”

—H.  L.  Mencken (1880-1956), newspaper pundit and social critic

We only half realize how influenced we are by the people and culture around us.

The cultural influences are more obvious to detect.  If you’re a married American living in the suburbs with a couple of kids in grade school, chances are you own a cell phone, eat lots of pizza, and have an SUV (Sports Utility Vehicle) in your garage.

But looking deeper at their motivations, people are often amazed to discover how similar their choices are to the key people in their lives — family, friends, and neighbors.  Social network research, for instance, has shown that your friends have a strong influence over which brands of products you buy, who you vote for, whether or not you smoke cigarettes, and what religion you follow.

Now it’s one thing to appreciate the impact that social networks have on us.  It’s quite another to take that theory and turn it into a software and consulting business.  But that’s exactly what Idiro Technologies has done, and its Director of Sales and Marketing, Simon Rees, is here to tell us about it.

I met Simon only a few weeks ago when his company sponsored an analyst breakfast during the recent Management World in Dublin.  The featured speaker at the event was Vodafone Ireland’s Alessia Kosagowsky, who touted some impressive results from implementing Idiro’s Social Network Analysis (SNA) solution at her company.

So here’s some insightful commentary from Simon on how to exploit friends and family connections to combat churn and win new business.

Dan Baker: Simon, the term predictive analytics has been bandied about for several years now in telecom.  How’s that different to using Social Network Analysis?

Simon Rees: Sure Dan.  Predictive analytics looks at an individual’s behavior to predict what I will do in the future.  SNA, meanwhile, doesn’t look at you, but looks at what your friends do.

It looks at how a man or woman is influenced as a member of a community.  At the heart of SNA is a deep examination of on-net and off-net phone calls and texts, etc. from which a social network map is created.  For instance, our customer, Vodafone Ireland, is the mobile market leader in Ireland with significant competition from O2 Telefonica and Meteor.  So in a month’s time, nearly everybody calls someone on Vodafone Ireland’s network.  As a result, we can see all these Call Detail Records (CDRs).

And we use those records to build a complete picture of the market as a whole.  Now when an off-net customer calls another off-net customer, that record is obviously not available.  But we can still get a partial picture using the on-net calls.  For example, you detect that three people called a certain off-net customer.  That person would be a good acquisition target because three Vodafone Ireland users call that person a lot.

Now whether you are legally allowed to call that off-net person to make an offer depends on the country you’re in.  In the U.S. you can do that as long as you respect “do not call“ laws, but in other countries it’s more restrictive, so you have to do get member promotions.  Even still, that’s a marketing concern, not an analytic one.

Simon, when I first heard that your firm did Social Network Analysis, I immediately thought you were analyzing Facebook or LinkedIn pages, which of course isn’t true.

Yes, there are plenty of intrepid software developers out there starting to leverage Facebook analytics in marketing.

Idiro is not one of them.  You see, there are some serious limitations to exploiting Facebook data.  Number one, mobile operators simply don’t have access to that kind of data.  Second, unlike mobile phones, Facebook and other such media are not universally used.  And the third problem is your Facebook buddies usually doesn’t reflect your close friends.  For example, my wife, who I love dearly, is on Facebook, but I never communicate with her on Facebook.

So examining the ebb and flow of CDRs is really the richest data source we have for community marketing.

OK, you’ve built your social network map and it shows thousands of little communities on it.  But how do you determine who the influencers are?  Is it simply the person with the most call volume and connections?

That’s an interesting question.  And, as you can imagine, a lot of our proprietary research and algorithms are around figuring out exactly who the biggest influencers are in a group.

Suffice it to say that it’s not as clear cut as it appears.  Say you have three different people each spending $100 a month.  Well, the social network value of those people could be entirely different.  For instance, one person is a 22-year old woman who spends all her money calling her boyfriend in Chile and she rarely talks to anyone else.  A person like that has few friends and therefore little influence.

But then there’s another woman who is captain of the basketball team and she’s got lots of friends.  If someone like that left your network, it’s likely to cause greater collateral damage.

It’s that type of information that’s valuable here, and it’s why operators like to stick that intelligence in their customer care system so the people with the most influence are treated better.  And if you have free concert tickets to give away, you pick the people who have the most influence over their friends.  Because they will tell their friends how wonderful T-Mobile is.

Many operators are using the Net Promoter Score to measure whether a customer is happy with the operator’s service.  Is this similar to SNA?

Actually, the NPS only tells you whether a user feels positive or negative.  What it doesn’t tell you is how influential that user is.

Even still, if you combine SNA and NPS, you have data that is pretty powerful.  The only difficulty is that most operators don’t have a Net Promoter Score for their whole base, only for a sample.  And this is because the NPS is usually determined from actual interaction between the user and a call center or follow up survey.  And lots of people never phone customer care.

Who do you consider an ideal customer for SNA?

The ideal operator is one who is eager to improve its CRM and marketing.  The companies who make the most of SNA also tend to be flexible and not afraid to experiment with new processes.

While many operators in the emerging world are still grappling with the basics of mobile marketing, SNA can be very useful to them.  Take, for example, the West Africa operators or Southeast Asian operators.  These are not rich markets, yet the operators there can get fairly sophisticated because software like ours comes with pre-packaged templates for programs that were rolled out by first world operators.

Are there any operators who might not get their money’s worth from SNA?

The only ones where the value is questionable are the operators who have a very low market share.  SNA won’t work well for them because they have too small a data sample, i.e. if your network is only collecting 1% of the CDRs in a country.  So when you’re analyzing your off-net calls, it’s hard to get a good picture of the whole country.

But if you take an operator like Sprint, they are the third largest operator in the U.S. so you can build a good social graph of the entire market because nearly everybody will call someone on a Sprint network in a month’s time.

SNA is a lot like buying a microwave oven.  If you use the microwave like a traditional oven, then the value that you get from it will be limited.  However once you change your shopping, cooking and eating behavior to take advantage of what makes the microwave different, then you get much more benefit.

Similarly, to use SNA effectively, marketing needs to get involved and be open to new ways of marketing.  So companies who are flexible and willing to develop the community dimension in their marketing are the ones who really get value from SNA.  Certainly all the major operators in a marketplace can profitably employ SNA.

There are a number of telecom software companies targeting analytics, but it’s often a side show to another specialty such as billing or revenue assurance.  But Idiro is rather unique because of your niche in SNA.

Yes, I think we are unique.  In fact, our biggest challenge is less around software and more around guiding our customer.  In the past, operators would buy the tool but didn’t really know how to roll out a campaign.  So we have developed a competence in data driven viral marketing within Idiro, so today we give customer training, workshops, and provide numerous templates to help the client along.

Sometimes we sit with an operator and go through their quarterly marketing plan and help them identify how to make their campaigns more viral.  So to succeed in our business, Idiro must not only be good on the software R&D side, we also need to be experts in helping the telco extract value from our tools.

This article first appeared in Billing and OSS World.

Copyright 2011 Black Swan Telecom Journal

Simon Rees

Simon Rees

Luke Taylor is CEO for the Europe, Africa and the Middle East (EMEA) business unit, as well as global responsibilities for worldwide marketing at Neural Technologies for the Group.  He has led teams in the EMEA regions to grow revenues year on year.

Luke has been with Neural Technologies since 1997.  Recent achievements include the launch of the combined fraud, credit risk and revenue assurance product, continued expansion of  MinotaurCloud outsourced hosted risk management system deployments in the region.

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