Maxis

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

® 0

Presentation Agenda

• Maxis and the Malaysian mobile industry • Customer Lifecycle Management • Sample Cases: Revenue Enhancement Campaigns

• Learnings

1

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)

2

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) 3

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

4

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

Environment Challenges

• Market reaching maturity with 71% penetration rate • Intense competition with much lower cost of entry: • • • •

Campaign 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 • • • • •

creates multiple-SIM phenomenon and phantom 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 5

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 Value

Acquisition

Target/ acquire subscriber

Welcome Program

Customer development

Harvest

Win Back

Revenue Enhancement Migration Pro-activity based on “If” events: - Lifetime - Usage/ purchase - Behaviour

Churn Prevention/ Reduction

Expiration

Analytical insights

Time / insights • Behaviour Scoring • Response rates

• Contact Policy •Segmentation (Value/Needs)

• Tariff Plan Optimisation • Cross Sell / Up Sell

• Churn Propensity • Churn Segmentation

7

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

Target Marketing

• Usage stimulation • Plan migration • Tactical rewards

Above-the-line Advertising

Below-the-line channels

• SMS • MMS • WAP Push • Outbound calls • e-DMs

8

Presentation Agenda

• Maxis and the Malaysian mobile industry • Customer Lifecycle Management • Sample Cases: Revenue Enhancement Campaigns

• Learnings

10

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

11

Campaign continues to yield good net take rates and positive ROI Campaign

Avg 8%

Net Take Rate(%)

Highlights:

6.5%

ABL : 2231

8.3%

ABL :2221

8.0%

ABL :2211

• RM0.30 impact per target 9.1%

ABL :2201

• Higher net takes for one tariff plan

8.3%

ABL :2191

8.2%

ABL :2171 0.0%

Campaign

• 8% net take rate

2.0%

4.0%

6.0%

8.0%

10.0%

Avg RM0.30

Impact Per Target (RM)

ABL : 2231

• Highest response rate and ROI for segment with highest usage reduction

0.51

ABL :2221

1.06

ABL :2211

• However, higher ROI for another plan

• Explore staggered free SMS offer

0.22

ABL :2201

1.03

ABL :2191

• Best time in the month to do campaign drop

-0.54

-0.61

ABL :2171 -1.00

-0.50

0.00

0.50

1.00

1.50

12

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

13

Lower entry packages have higher take rates 4

2

Segment 1

5 5

2

5 5

Segment 2

8

6

2 5 5

Segment 3

8

3

Learnings:

• Purchase trigger

9

works better for certain segments

7 7

Segment 4

12

6

12

Segment 5

14

• Subscribers from

14

3

Segment 6

Segment 7 Segment 8

0 0 0 0 0 0 0

0

0

• Presence of a

1

“sweet spot” on promo validity period

1 1 1 1 1 1 1 1 1

Segment 9

certain tariff plan respond more than those in other plan

18 18

2

3 5

10

15

20

14

Takers’ usage tracking cat Onnet

10000

• During the first 3 days of the promo, total on-net MOU increased by 24% compared to the same 3 days the week before

Sum of mou

9000

• But, overall total MOU throughout the day remained the same

8000 7000

call_date

6000

09/06/2006 10/06/2006 11/06/2006 16/06/2006 17/06/2006 18/06/2006

5000 4000 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

15

And the next 6 weeks monitoring would show marginally lower usage for target group against control $5,000,000

Total Usage (RM)

$4,000,000 $3,000,000 $2,000,000 Total Target

$1,000,000

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 16

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

17

Incremental overall usage lift of 20% after 5 weeks

Overall Usage 25,000,000

(RM)

20,000,000 15,000,000 10,000,000 δ = 19.9Μ 2 0 %↑

5,000,000

Control

W ee k5

W ee k4

W ee k3

W ee k2

W ee k1

W ee k0

W ee k1

W ee k2

-

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 18

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

19

Presentation Agenda

• Maxis and the Malaysian mobile industry • Customer Lifecycle Management • Sample Cases: Revenue Stimulation Campaigns

• Learnings

20

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

Focus first on critical business issues

Skills development, training & consultancy

Ownership by the business, not IT

Top Management support

Analytical minds & lots of creative brainstorming

Continuous campaign monitoring and transfer of learnings

Unified CLM datamart Effective execution via tools, processes & quality controls

21

Thank You

www.maxis.com.my

® 22