Driving Revenue Enhancement Campaigns

The Maxis Experience

7th Annual Customer Retention Forum

for Telecommunications
21-24 May 2007
Singapore

Evelyn Jimenez
Head of Customer Lifecycle Management
Maxis Communications Berhad, Malaysia

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 Presentation Agenda

• Maxis and the Malaysian mobile industry

• Customer Lifecycle Management

• Sample Cases: Revenue Enhancement
Campaigns

• Learnings

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 Malaysia at a glance

• Located in Southeastern Asia,

Malaysia is basically divided into 2
regions: Peninsular Malaysia and
East Malaysia

• Land area: 328,550 sq km

• Population: 27.8 million (2006 est.)

• Median age: 24 years

• Multi-cultural society: Malays,

Chinese and Indians

• GDP (purchasing power parity):

$249 billion (2005 est.)

• Internet users: 10 million (2005)

• Mobile users: 19.7 million (2006)

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 Maxis at a glance

• Maxis commenced commercially in 1995 and

is the market leader in the Malaysian mobile
market
• 3 lines of businesses with prime focus on
Mobile (supported by Fixed Line/Broadband and
International Gateway)

• We have over 8 million mobile subscribers with 41% market share and 46% industry revenue
share as at end Y2006

• Maxis is perceived to be a premium and innovative service provider

– Asia’s 200 Most Admired Companies 2006 – No. 1 Overall in Malaysia (The Wall Street Journal
Asia)
– Malaysia Telecom Awards 2006 – Mobile Service Provider of the Year (Frost & Sullivan)
– Asian Mobile News Awards 2006 – Winner of Publisher’s Choice (Charlton Media Group)
– National Contact Centre Award 2006 (Customer Relationship Management & Contact Centre
Association of M’sia)
– The Asia HRD Congress 2006 Award for Dato’ Jamaludin Ibrahim
• Now entering an exciting new phase in growth, with the international acquisition of 51% stake in
Natrindo Telepon Selluler (Indonesia) and 74% in Aircel (India)

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 We remain determined to be innovative with new
products and services

Product and services launched in 2004-2006

• Recent products Maxis was 1st to market for:

• Caller RingTones
• Background Music
• Push-to-talk
• UniFun
• Blackberry
• Enterprise Desktop SMS
• Video Streaming
• Java Stock Live!
• Personalised Music Portal (“Music Zone”)
• 3G Datacard services
• Prepaid 3G packs

• Main Sponsor in Malaysia for FIFA World Cup 2006

• Introduction of New Rate Plans – Total & Easy
• Introduced E-reloads, share-a-top-up, residential
broadband and Maxis TV

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 While acquisition is still needed, customer retention
becomes more critical in a maturing, commoditizing market

• Market reaching maturity with 71% penetration rate

Environment • Intense competition with much lower cost of entry:
Challenges cheaper starter packs and further reduction in tariffs
• Mobile service now a commodity, no longer a luxury
• As revenue starts to slow down, premium
positioning is no longer sustainable
• Subscriber stickiness is a critical business driver
• Growing value-added services and mobile data
business
• Aggressive acquisitions expand the market, but it also
Campaign creates multiple-SIM phenomenon and phantom
Challenges churn
• Targeted CLM campaigns are more efficient and
sustainable on a long-term basis
• Millions of daily CDRs processed to timely, meaningful
and actionable information
• Speed to market
• Quantity and quality of campaign executions
• Campaign effectiveness monitoring

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 Presentation Agenda

• Maxis and the Malaysian mobile industry

• Customer Lifecycle Management

• Sample Cases: Revenue Enhancement
Campaigns

• Learnings

6
 Focusing on churn reduction, revenue enhancement and
migration within the customer’s lifecycle

Customer
Acquisition Harvest Win Back
development

Target/ Revenue Enhancement

Customer Value

acquire Migration Churn Prevention/

subscriber
Reduction
Pro-activity based on “If”
events:
Welcome - Lifetime
Program - Usage/ purchase
- Behaviour Expiration

Time / insights
Analytical
insights

• Behaviour Scoring • Contact Policy • Tariff Plan Optimisation • Churn Propensity

• Response rates •Segmentation (Value/Needs) • Cross Sell / Up Sell • Churn Segmentation

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 Data mining and below-the-line channels are our
enablers toward an effective lifecycle management

From…. To….

• Segmentation
• Predictive Modeling
Standard Data Reports Data Mining • Customer Profitability

• Churn management

Traditional Marketing • Usage stimulation

Target Marketing
• Plan migration
• Tactical rewards
Above-the-line Below-the-line
Advertising channels • SMS
• MMS
• WAP Push
• Outbound calls
• e-DMs

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 Presentation Agenda

• Maxis and the Malaysian mobile industry

• Customer Lifecycle Management

• Sample Cases: Revenue Enhancement
Campaigns

• Learnings

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 Tactical Rebates Campaign (Broad Launch)

Segmentation Concept Offer Concept

High churn risk Active base Aggressive rewards offer

By tenure bands Staggered airtime rebates

By rate plan Various purchase triggers

Promo validity

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 Campaign continues to yield good net take rates and
positive ROI
Campaign Net Take Rate(%) Avg 8%

ABL : 2231 6.5%

Highlights:
8.3%
ABL :2221
• 8% net take rate
ABL :2211 8.0%

• RM0.30 impact per target

ABL :2201 9.1%

• Higher net takes for one

ABL :2191 8.3%
tariff plan
8.2%
ABL :2171
• However, higher ROI for
0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
another plan
Campaign Impact Per Target (RM) Avg RM0.30
• Highest response rate and
ABL : 2231 0.51
ROI for segment with
highest usage reduction
ABL :2221 1.06

ABL :2211 0.22 • Explore staggered free

SMS offer
ABL :2201 1.03

• Best time in the month to

ABL :2191 -0.54
do campaign drop
-0.61
ABL :2171

-1.00 -0.50 0.00 0.50 1.00 1.50

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 Happy Hour Test Campaign (Prepaid)

Segmentation Concept Offer Concept

Active and Deactive base segments Timeblock based on network utilization

Voice on-net MOU bands Discount on on-net local voice calls

Incoming Call Usage Ratio Various top-up or purchase triggers

Rate Plan Various promo validity days

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 Lower entry packages have higher take rates

4
2
Segment 1 5
5
2
5
5
Segment 2 8
2
6 Learnings:
5
Segment 3 5
9 • Purchase trigger
8
3 works better for
7 certain segments
7
14
Segment 4 12
6
• Subscribers from
14
Segment 5 12 18 certain tariff plan
3
18 respond more than
0 those in other plan
0
Segment 6 0
0
1 • Presence of a
0
0
“sweet spot” on
0 promo validity
Segment 7 1
1
period
1
0
1
Segment 8 1
2
1
1
Segment 9 1
1
3

0 5 10 15 20
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 Takers’ usage tracking
cat Onnet

• During the first 3 days of the

Sum of mou
10000 promo, total on-net MOU
increased by 24% compared to
9000 the same 3 days the week before
8000 • But, overall total MOU throughout
the day remained the same
7000

call_date
6000 09/06/2006
10/06/2006
5000 11/06/2006
16/06/2006
17/06/2006
4000
18/06/2006

3000

2000

1000

0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

d_hout

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 And the next 6 weeks monitoring would show marginally
lower usage for target group against control

$5,000,000

$4,000,000
Total Usage (RM)

$3,000,000

$2,000,000

$1,000,000 Total Target

Total Control

$-
-2 -1 0 1 2 3 4 5 6

Weeks from Campaign Drop

¾ Campaign was not brought to Broad Launch

¾ Review of the customer segmentation and redesign of the campaign offer combination

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 Applying Prepaid SMS Bundles learnings to Postpaid

Segmentation Concept Offer Concept

By Plan Type, Principal or Supplementary SMS Bundle offer combinations

Demographic Segments Various discounted price points

Average usage for the past 3 months Promo validity, Bundle validity

Average SMS counts per month

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 Incremental overall usage lift of 20% after 5 weeks

Overall Usage

25,000,000

20,000,000

15,000,000
(RM)

10,000,000
δ = 19.9Μ
5,000,000 2 0 %↑

-
2

k0

k1

k2

k3

k4

k5
k-

k-

ee

ee

ee

ee

ee

ee
ee

ee

W
W

Control Target

Note:
1.Delta, indicated above, is an average of the difference between target and control group after campaign launch
2. Total Usage refers to accumulated total usage of both MOU and SMS

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 Free festive content and MMS viral campaign
RAMADHAN, DEEPAVALI, HARI RAYA AND CARTOON-ME MMS

Highlights:

• Effective in
creating viral
effects but
difficult to track

• Increase in overall
P2P MMS usage
comparing target
and control
groups

• Informational
MMS services
without incentive
also work

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 Presentation Agenda

• Maxis and the Malaysian mobile industry

• Customer Lifecycle Management

• Sample Cases: Revenue Stimulation
Campaigns

• Learnings

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 Based on our experience, it takes several components
to make the CLM operations successful

Dedicated CLM team

Skills development,
training & consultancy
Focus first on critical
business issues

Ownership by the
Top Management support business, not IT

Analytical minds & lots

of creative brainstorming
Unified CLM
datamart

Continuous campaign Effective execution via

monitoring and transfer tools, processes &
of learnings quality controls

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 Thank You

www.maxis.com.my

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