What is “contextual loyalty”?

Many marketers know the term “marketing loyalty” as a form to retain existing customers through incentives. But how do marketers ensure that they get it right in the mobile market, where competition is fierce on one hand, while technology evolves every changing minute?

The simple solution is to combine these two elements with the way people are consuming other technologies these days: quick, real-time and targeted consumption and the answer is simple: Contextual Loyalty. What does this mean? Take a leaf from Google’s book and offer customers relevant offers at the right time… time and time again.

The question of loyalty schemes usually arises when a service provider struggles with brand awareness or with low differentiation in his product portfolio, as the case is in most telecom operators, and therefore has high churn rates when subscribers drift to the competition.

That is why it is important not to start with a loyalty strategy scheme once the service providers realise that a big chunk of its customers is churning; as the saying goes: prevention is better than cure, and therefore t is crucial that the operator build the relationship with the customer from day one.

Service providers need to be able to follow their entire customer base as if they were following each and every one of their customers individually. They need to understand what each customer needs, based on individual behaviour and, based on these factors, utilise the right channels to present the best offer which will generate satisfaction and loyalty.

This becomes even more complex when one needs to do this in real time, as customer needs changes constantly. Another hurdle marketers face, is how to keep track of the number of consumers taking action as a direct result of offers received?

This requires a contextual marketing solution providing real-time context detection, enabling marketers to follow real time behaviour and, based on this, follow up with better and more specific personalized offers. The challenge is how to prevent offering free cups of Starbucks coffee to a customer that does not even drink coffee.

This offer itself can be communicated to the subscriber through SMS to the mobile device but also through other channels such as mobile applications and micro sites offering customers personalized selection of Telco rewards, personalised selections of third-party offers, as well as other kinds of personalized incentives tailored to each customer based on behavioural patterns.

This also means that the solution will be able to classify the customer as high, mid, or low – based on its loyalty which is measured by MOU, service usage and frequency of spend patterns and then follow up with a rewards, according to a customer previous reward selection and his relative importance to the operator.

For example: For heavy SMS users, select SMS bundles/ discounts and for customers who spend only around 10% of their usage on off-net calls, prefer on-net bundles over cross-net bundles. Another example is to tailor the type, size, duration, and pricing of the Telco rewards to each participant, per his individual usage and spend pattern, e.g.: Offer a bundle of Mobile Internet volume for a longer duration to low data users, and for shorter duration to high data users.

By using methods such as the ones described above, service providers will ensure that each individual customer will receive relevant and personalized offers , based on the customer’s value and churn risk, as well as being fully in-line with the marketing objectives the service provider has set for each specific customer.

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Michal Samuels Hod is Marketing Manager at Pontis. Prior to joining Pontis, Michal served as Marketing Manager at NICE systems HQ, where she was responsible for defining and implementing the go-to-market strategy for the company’s products and services; creating and managing the production of company’s sales marketing collateral and events management. Prior to that Michal served as Senior Account Manager in global PR companies Rudder Finn and Euro RSCG, representing major customers such as Google Israel, CNN and Turner Broadcasting Group.