Jerry Power of CTM: Heading into big data full on, without
attention to the creepy factor, can have dangerous
Service providers collect oodles of data on customers and
networks. Although they’re all positioned to mine
big data, few perform the kind of analysis needed to turn it
into growth opportunities, revenues and profits.
Giants such as AT&T successfully apply big data concepts in
marketing. They target customers and make offers that reflect a
deep understanding of markets and buying behaviours.
But that’s just scratching the surface of
monetisation opportunities. Big data is all about getting
better answers, much faster. So what do providers need to do to
find the gold nuggets hidden in their big data?
One: Build trust and avoid the creepy factor
In consumers’ mental model of trust, the
least-trusted companies maliciously take advantage of them. To
build trust, such companies need to prove there’s
no malicious intent.
Up one level in the trust hierarchy are companies that try to
take care of customers. Their systemic failures are accidental
— inept rather than malicious. For example, they may
sell customer data to a third party that unknowingly used it
Atop the trust ladder are companies that consumers see taking
care of them as they want to be. Jerry Power, executive director of the Institute for Communication Technology
Management at the University of Southern California, says:
"Companies that have my back have earned the most trust.
Demonstrate to customers that you have their best interests at
heart." The good news: many telecoms providers have earned such
"There’s good correlation between the level of
trust in a company and its brand value. There are clearly
brands people will pay more for. When you’re
trying to get someone to spend money, trust is key," says
"If people trust the company, an offer to provide a better
service is not seen as creepy, but as helpful. Giving that same
data to a third party could turn into something creepy." He
cites the example of an American retailer that applied big data
to market to a pregnant teenager. It turned out that her father
was unaware of her pregnancy, until he saw ads in the mail.
"Heading into big data full on, without paying attention to the
creepy factor, can have dangerous repercussions," Power says.
"Trust is not just a legal definition, it’s a
compact between you and consumers. To make applications of big
data viable, trust policies should be looked at by marketing,"
To build trust, tread carefully. For example, consumers
routinely receive privacy statements as they buy services. But
they almost never read them. Why? "It would take a month per
year to read all the privacy statements a consumer receives,"
Two: Overcome organisational boundaries that hold back
As providers know, customer satisfaction dips during periods of
network congestion. But, since marketing and operations are
separate, marketing does not often leverage
operations’ data on network faults and congestion.
Instead, marketing reacts when customers complain or
competitors make a new offer.
Big data helps providers proactively preserve customer
satisfaction. For example, when there’s highway
construction, cars back up and people use mobile phones. Big
data can identify that situation quickly, enabling cell sites
to be reconfigured more quickly.
In IP networks, big data can forecast where and when congestion
will occur. That means providers can anticipate demand and
reconfigure networks for coming loads, improving
Consumers are highly discriminating about mobile quality, and
they talk about it. In New York City focus groups, consumers
cite which devices work better with which apps. They know that,
at 42nd Street and Broadway, one provider is better at street
level and another is better in a corner room 30 floors up.
Being able to improve service quality is a key to winning
customers from competitors.
To consumers, network quality means the service they paid for
is available when they need it. Consumers may not know if a
problem’s root cause is a device, app, network or
website. Technically, they may assign blame to the wrong
suspect. But, to them, that doesn’t matter. What
matters is they could not do what they wanted to.
That’s why marketing and operations need to work
together to apply big data. Marrying network performance and
marketing data can unlock value for providers. "By linking
operations and marketing data, instead of being responsive,
marketing could become anticipatory," Power says.
Who has the best opportunities with big data? Providers in
emerging markets hold the advantage of less-defined markets.
For example, in the Philippines, a door-to-door sales model
similar to Tupperware is used in telecoms. Prepaid minutes are
sold in bulk; resellers can break up minutes to resell. As that
data flows in, a provider can gain unique insights on
Small providers hold an advantage over larger players. Since
they don’t need to overcome huge organizational
hurdles, they can move faster. On the other hand, large
providers have greater resources. This will make
telecom’s Big Data gold rush fascinating.
Three: Apply both science and art
"Big data is just a tool to supply answers to
questions. Ultimately, the goal is to speed response time. The
quicker you can respond to questions about a changing market,
the better the business result. Focus on the big data that
holds the greatest value," says Power.
As big data becomes cheaper to store, it’s easier
to hold it longer. Providers who want to create value start by
forming hypotheses, then testing to see what big data supports.
Going through data, providers learn new things and discover new
hypotheses, which can be tested through an iterative process.
"There’s art in this science. How you look at data
and figure it out is the creative part. You think out of the
box, looking for an improvement over the way we did it before.
With the right blend of science and art, we can do a lot better
at finding answers," Power says.
"Maybe your first hypothesis fits the data 90%. Further work
gives you a 5% improvement and the next iteration gives another
2%. At some point you’ll say, 'That’s
close enough,’ sufficiently accurate to answer the
question. You also need the right context around the question."
Hiring the right talent is currently a challenge. Demand for
big data scientists is growing apace. Universities
don’t turn out enough graduates to meet demand. So
the price of talent is being bid up in telecoms, finance,
Hollywood and e-commerce.
"The field of marketing is undergoing a metamorphosis.
Marketers need to hire different people and add more data-savvy
personnel. The curriculum in marketing will evolve rapidly in
the next 5 years," Power says.
Four: Big data increases the value delivered by
Telecoms consider marketing and big data to be expenses, rather
than investments in future revenues and profits.
That’s a fundamental problem.
In financial statements, marketing gets bundled with sales,
general and administrative expenses. But as providers unlock
growth potential with big data, they may come around to seeing
it as an asset.
"Providers tout research and development spending as a sign of
investing in the future. I see marketing investments
representing future business results just like R&D," Power
says. "I look forward to companies talking about marketing as
an investment in the future, a topic that might show up in an
annual report. Big data is an asset."
Five: Telecoms providers must work with others
The interactions of telecoms providers with entertainment,
content, technology and device companies will shape the future.
Companies are realising that no one company or industry can
shape the future of the market by itself.
That’s why USC Marshall’s Institute
for Communication Technology Management was formed in 1985.
It’s a think tank to address how telecoms and
media markets interact. An industry-funded group of about 20
companies, CTM members include AT&T, Verizon, Telus, PwC,
Deloitte, Qualcomm, Cisco, Alcatel-Lucent, Ericsson, Disney,
Warner Brothers, CBC and others.
"CTM is not technology-focused but business-focused, taking a
business view of how these spheres interact. We do market
research and educational sessions, hold open forums and work to
represent a collective view," Power says.
CTM focuses on fundamental questions such as:
• What makes a digital house? How much bandwidth needs to
go to the house when the ability to comprehend data is
• How are people using mobile devices?
• What makes advertising different in a multidevice
• What actions can be taken to energize the parts of the
world that are falling behind the mobile curve?
"The future of media will be driven by different business
models, because of the changing landscape in the way we consume
and deliver media. Everyone agrees this world is changing, but
no one agrees on where it’s going," Powers says.
While TVs remain the number one consumer device, smartphones
and tablets now drive more than 50% of content consumption.
"Net content consumption is going up. If you look at composite
consumption, people who cut the cord [on traditional cable TV]
actually consume more media than those who haven’t
— they just consume it differently. The golden age of
TV may still be in front of us."
Since the drivers of change go beyond geographic, demographic
and economic issues into education and healthcare, strategies
that work in one country or segment may not be replicable
Here’s another big data opportunity —
telecoms providers could measure broadband bitstreams and
produce Nielsen-type ratings for websites and apps. Big data
could show content companies and advertisers which websites and
apps get used, which bitstreams command attention and where to
deliver greater value. There’s plenty of gold to
mine in telecoms’ big data.
George Stenitzer consults, speaks and writes on marketing
at Crystal Clear Communications. http://www.crystalclearcomms.com
His previous column for Global Telecoms Business is here . He will be writing
regularly for GTB