CEM&Loyalty johannesburg_aug2014

© 2014 IBM Corporation

IBM Institute for Business Value

Social Media and the Empowerment of

African Consumers

Rob van den Dam

Global Communications Industry Leader




IBM 2014 Global Telecommunications Consumer Survey

22,000 consumers in 35

countries took part in the

survey, covering:

Customer Spending

priorities

Adoption of Comms

services

Sources of Information

Customers’ attitudes

towards CSPs

Customer Advocacy

Customer Trust

2

2014 IBM Global Telecommunications Consumer Survey



IBM 2014 Global Telecommunications Consumer Survey

3

2014

Global Telecom Consumer Survey

China

(1265)

Australia

(652)

Canada

(594)

Belgium

(323)

Brazil

(671)

Denmark

(319)

Egypt

(343)

India

(1038)

Finland

(309)

Greece

(738)

France

(1343)

Germany(

831)

Indonesia

(735)

Ireland

(351)

Mexico

(658)

Italy

(560)

Malaysia

(506)

Japan

(964)

Kenya

(322)

Netherlands

(548)

New Zealand

(464)

Russia

(1003)

Nigeria

(550)

Poland

(328)

Norway

(303)

Philippines

(877)

Saudi Arabia

(306)

South Africa

(649)

UAE

(320)

Spain

(809)

Turkey

(533)

Sweden

(354)

Thailand

(616)

UK

(657)

US

(1083)



Africa still has the lowest telecommunication penetration rates, but is

experiencing the fastest growth in mobile and internet users worldwide

4

Mobile Penetration:

71%

Internet Users: 39%

Mobile Penetration:

73%

Internet Users: 38%

Mobile Penetration:

147%

Internet Users 49%

Mobile/Cellular Penetration 69%, but

HIGHEST (‘13/’14) Growth: 5,2%

Internet Users 19%, but

HIGHEST (‘13/’14) Growth: 13%

Mobile Broadband Penetration 19%, but

HIGHEST (‘13/’14) Growth: 43%

43%

21% 19% 16% 15% 12%

AF

RIC

A

Asia

&

Pa

cific

Ara

b

sta

tes

Am

eri

ca

s

CIS

Eu

rop

e

Asia&Pac: 920 Mio

Americas: 577 Mio

Europe: 399 Mio

Africa: 172 Mio

CIS: 138 Mio

Arab: 92 Mio

ITU Statistical data base

Nigeria

Kenya

S. Africa



Africa claims to be the ‘Mobile Continent’ and the results of our

consumer survey confirm this statement

5

How often do you access the Internet through the following?

73%

57%

25% 20%

8%

12%

21%

7%

19%30%

55%

73%

0%

20%

40%

60%

80%

100%

Daily Weekly Occasionally

Including

Home

WiFi

Public

WiFiMobile

Global (weighted average of 35 countries)

Including

Home

WiFi

Public

WiFiMobile

66%72%

20% 17%

0%

20%

40%

60%

80%

100%

Daily Weekly Occasionally

36%

88%

20% 20%

45%

85%

31%

20%

Ken

ya

Nig

eria

S. A

fric

a

African countries

Source: 2014 IBM Global Telecom Consumer Survey, How often do you access the INTERNET through the following?



6

53%50%

40%36%

28%

22%22%20%20%19%

13%13%13%12%12%10%8%6%5%5%5%3%2%0%

-2%-4%-4%-5%-8%-8%-10%

-15%-15%-16%

-37%

Gre

ece

Ire

lan

d

Ita

ly

Neth

erla

nds

Be

lgiu

m

Sp

ain

Po

lan

d

Phili

ppin

es

Ja

pa

n

UA

E

Fra

nce

Ge

rma

ny

UK

US

Sw

ed

en

Fin

lan

d

Ca

na

da

Mala

ysia

No

rwa

y

Au

str

alia

Me

xic

o

Ru

ssia

De

nm

ark

Ne

w Z

ea

lan

d

Sa

ud

i Ara

bia

Bra

zil

SO

UT

H A

FR

ICA

Eg

yp

t

Tu

rke

y

Ind

on

esia

Th

aila

nd

Ind

ia

Ch

ina

NIG

ER

IA

KE

NY

A

Net Decrease/Increase Consumer spending MOBILE BROADBAND usage (Internet from Mobile)

(2014 – 2016)

Question: Compared to previous years, are you likely to spend less, the same or more on mobile phone usage (voice calls, SMS, MMS) in the next 2-3 years?

Consumers in African countries expect to increase spending on

accessing the mobile Internet



7

24% 19% 57%

25% 18% 57%

25% 17% 57%

32% 19% 49%

49% 17% 34%

57% 18% 25%

74% 12% 14%

80% 11% 9%MOBILE PHONE

LAPTOP / NETBOOK

Desktop PC

TABLET

Internet-enabled TV

GAME CONSOLE with

Internet connection

eReader

OTHER (e.g. Internet-

enabled Blu ray player)

Very Valuable Moderately valuable Little valuable / Not applicable

How valuable is each of the following devices for you to access the Internet?

For accessing the Internet, the mobile phone has become the most

valuable device

92%

89%

88%

Mobile Phone ‘Very Valuable’

Question: How VALUABLE are the following devices for you to access the Internet?



8Question: How often do you use the following communications services?

Daily usage communication channels in EMERGING markets

in EMERGING

MARKETS use

Social Networks

daily to communi-

cate with others

74%

28%

25%

45%

26%

25%

36%

37%

50%

61%

65%

66%

74%

82%

30%

55%

58%

71%

66%

79%

76%EMAIL

SOCIAL NETWORKING

MOBILE MESSAGING

INSTANT MESSAGING / Chat

MOBILE VOICE calls

INTERNET VIDEO streaming/download

FIXED VOICE calls

MICRO-BLOGGING

VOIP (VOice over Internet)

VIDEO CALLING

All AGES

AGE < 25

21

People increasingly access the Internet to communicate with others;

Social Networking is the # 2 communication channel in emerging markets



In the African countries, use of Instant Messaging and Social

Networks to communicate with others is high

9

Daily usage communication channels

Question: How often do you use the following communications services?

Mobile Voice

Email

Social Networking

SMS/MM

Internet video

Email

Social Networking

Fixed Voice

87%

91%

76%

57%

45%

64%

96%

80%

81%

69%

57%

67%

IM/Chat

SMS/MMS

Mobile Voice

IM/Chat

IM/Chat

Mobile Voice Call

Micro-Blogging

SMS/MMS

Social Networking

Email

Social Networking

Internet Video

IM/Chat

Mobile Voice Call

Email

81%

82%

81%

69%

65%

74%

85%

79%

84%

76%

49%

75%SMS/MMS

Mobile Voice

Email

Social Networking

SMS/MMS

Micro-Blogging

IM/Chat

Email

Social Networking

88%

90%

87%

78%

69%

79%

91%

87%

90%

80%

61%

73%

SMS/MMS

Mobile Voice

IM/Chat

Micro-BloggingMicro-Blogging

Under 25

Above 25



10

12%

57%

31%

Reduce(d)Increase(d)

No Change

15%

52%

34%

Reduce(d)Increase(d)

No Change

Reduction

SMS usage

Reduction

traditional

voice calling

of respondents said they

have reduced – or will reduce

– SMS usage by increasingly

using alternative messaging

channels34%

of respondents said they

have reduced – or will reduce

– traditional voice calling

by increasingly using

alternative voice channels31%GloballyGlobally

Because of these OTT channels, many respondents said they decreased – or will decrease - spending on traditional communication

To what extent have you reduced – or will you reduced SMS usage and traditional voice calling by increasingly using alternative channels?

56%48%43%

0%

20%

40%

60%

So

uth

Afr

ica

Nig

eri

a

Ke

ny

a

43%36%33%

0%

20%

40%

60%

So

uth

Afr

ica

Ke

ny

a

Nig

eri

a

Global Global



11

in emerging

markets access

Social Media to

evaluate telecom

providers and their

products /services

69%

9%

20%

25%

28%

34%

48%

60%

69%

72%

23%

19%

13%

31%

56%

33%

69%Internet SEARCH

SOCIAL MEDIA

RECOMMENDATIONS friends/family

Telco WEB sites

Telco EMAILS & promotional offers

Traditional ADVERTISING

Retail STORES

Shopping PORTALS/auctions

Emerging Markets

Mature Markets

Sources of information on telecom providers and their products/services

The web, social media and word-of-mouth now dominate the traditional

channels for information relating to Telcos and their products/services

Question: What are your preferred sources of information when you are evaluating telecom providers and their products/services?



12

28%

50%

69%

72%

79%SOCIAL MEDIA

Internet SEARCH

RECOMMEND F/F

CSP web sites

Retail STORES

36%

49%

55%

58%

77%Internet SEARCH

RECOMMEND F/F

SOCIAL MEDIA

CSP web sites

Retail STORES

35%

54%

65%

75%

81%SOCIAL MEDIA

Internet SEARCH

RECOMMEND F/F

CSP Websites

Retail STORES

37%

39%

57%

67%

75%Internet SEARCH

SOCIAL MEDIA

RECOMMEND F/F

Retail STORES

CSP websites

<25

Social Media is a frequently used source of information in the African

countries

Sources of Information on telecom providers and their products/services

Question: What are your preferred sources of information when you are evaluating telecom providers and their products/services?



Word-of-mouth is important as it has become a key factor in

condidering a provider for products and services

13

15%

21%

22%

22%

43%

46%

51%

52%BEFORE BUYING when the provider provides information

When contacting my provider for RESOLVING AN ISSUE

BEFORE CONSIDERING the telecom provider

(REPUTATION)

On first purchase or BEGINNING OF SERVICE

When my provider PROACTIVELY ask for my experience

When I CONSIDER SWITCHING to a competitor

On receiving FIRST INVOICE

Close to the END OF SUBSCRIPTION period

3 59%

56%

52%

2

2

2

Key moments of interaction that matter

Question: What are the key moments in interacting with your telecom provider that matters to your?

Global

Importance

Word-of-Mouth

Reputation



Negative word-of-mouth can have a strong negative impact on a

telco’s reputation and, consequently, its business performance

14

10% 49% 42%

13% 62% 25%

20% 46% 35%

21% 46% 32%

25% 57% 18%

26% 59% 15%

29% 50% 21%

38% 55% 8%

40% 50% 9%

41% 49% 9%START considering COMPETITIVE services from other providers

Would TELL OTHERS about the bad experience

Would COMPLAIN to my telecom provider

Would DISCOURAGE OTHERS to use this provider

Would use the services of my provider LESS FREQUENTLY

Would STOP making PURCHASING from my provider

Would post a NEGATIVE REVIEW or comment ONLINE

Would COMPLAIN on SOCIAL MEDIA

Would NEVER USE my telecom provider again

NO CHANGE in behavior

Always/Often Regularly/Possibly/Sometimes Never

Customer responses in case of NEGATIVE experiences

Question: What would you do in case of a NEGATIVE experience with your telecom provider?

Global



15

54% 54%

42%

31%23%

67% 66%

33% 36%

20%

66% 64%

33%

49%

23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Too much

hassle to get

through to the

Call Centre

Have to wait too

long in queue to

speak to Call

Centre

Don't believe it

make any

difference

Networks

unreliable

anyway

My Provider is

unable to

resolve my

problems

South Africa Kenya Nigeria

Always/often complaining to

provider

Reasons not complaining to provider in case of negative experience

Question: If you not complain to your provider in case of a negative experience, what is the reason?

Telcos are not always aware that consumers have bad experiences:

less than half of consumers always/often contact them in those cases

49%

45%

44%



Word-of-mouth is an effective way for consumers to seize control on

some business decisions

16

12/29/11 Press Release:“Starting January 15, a new $2 payment

convenience fee will be instituted for

customers who make single bill

payments online or by telephone”

Within 24 hours, more than 100,000 people

had signed a online petition: …. Your company

should not assume that it can do anything to

your customers and that we will allow it to

happen…

12/30/11 Press Release:

“Verizon Wireless has decided it will not institute

the fee for online or telephone single payments that was announced earlier this week.

The company made the decision in response to

customer feedback about the plan…”



Word-of-mouth can also help a telco increase brand strength in case

of a positive experience, but what do customers perceive as ‘positive’?

17

Always/often

recommend

provider

72%

70%

69%

Top 6 POSITIVE experiences that make a customer LOYAL

Question: What are the most important experiences for you to STAY LOYAL to your telecom provider?

38%

40%

44%

57%

70%

90%Quality COMPELLING products/services

QUICK effective responses to questions

Resolving issues FAIRLY

PERSONALIZED & consistent service

EXCLUSIVE offers (loyalty program)

LOW PRICES relative to competitors

53%

56%

45%

55%

75%




TRANSPARENCY & openess



64%

45%

44%

63%

59%




PERSONALIZED & consistent service





Telcos are not leaders in customer advocacy by any customer

advocacy measure

18

No Telcos in Top 25

Telecom lowest among 7 industry groups

No Telcos in Top 50

No Telcos in Top 50

No Telcos in Top 100

Wireless industry ranked 44 of 50 industries

No Telcos in Top 50

Only one Telco in Top 100, O2 at #46

Customer Loyalty Metrices



IBM’s ‘Advocacy Index’ measures the level of advocacy by analyzing

responses related to recommendation, buying and staying intent

19

IBM’s ‘Advocacy Index’

measures the level of advocacy by analyzing responses, specifically

related to recommendation, purchase intent and staying intent

Likelyhood to

Recommend

Buying

Intent

Staying

Intent

Willingness to recommend one’s primary provider to

friends and family

A willingness to increase one’s purchases if one’s

primary provider expanded its assortment and offered

products currently found only at the other providers

A willingness to stay with one’s primary provider, even

if other provider begin offering competitive producers

or Services



The emotive and personalization aspects seem to make the

difference between advocates and antagonists, not low prices

20

Global average: POSITIVE experiences that make a customer LOYAL

Advocates

have a

higher

wallet

share and

are highly

compli-

mentary of

the

provider

capability

Antagonists

have low

wallet share

and high

support

costs and

are prone to

bad-mouth

the provider



Telcos should look outside their industry for leadership in providing

customer experiences that drive loyalty

21



22

Groups

Individuals

Reactive Proactive

Mine

ConversationsCrowdsource

Insights

Reply to

Questions

Influence

Influencers

Today Next two years

Respond to

customer questions

Solicit customer

reviews and opinions

Capture

customer data

Identify and manage

key influencers

79%

79%

47%

68%

47%

68%

35%

59%

Applying social approaches to ‘listen & engage’ customers

(±2/3 of telco respondents in Social Business survey)

Source: Institute for Business Value, 2012 Business of Social Business Study

(% CSPs with customer-related social business activities)

An increasing number of Telcos are implementing social business to

understand customers and engage with them in new and different ways



Some Telcos are even proactive in understanding services issues by

trolling social networks to understand sources of dissatisfaction

23

O2's Twitter team

demonstrate their

social media moves

on angry tweeters

London, July2012

O2 UK experienced widespread network

problems affecting hundreds of

thousands of its customers in July 2012,

user anger was boiling over, with many

customers expressing their

dissatisfaction on Twitter. O2, however,

turned the tides, by using Twitter to

deliver fast, professional customer

response and was able to maintain their

brand image by adding humor and

personality to their tweets

Having the official verified Twitter

profile @Airtel_Presence, Airtel scan

for every tweet containing the word

“airtel” in it and giving appropriate

replies to customers and solving their

issues.

Airtel uses social network analysis to

determine customers’ facing problems.

Any mention on social media

(Facebook, Orkut, Twitter, etc.) is

captured and they get in touch with the

customer to get issues resolved.



24

of respondents like to

interact with their

provider on improving

an existing product

60%

60%

56%

38%

26%

22%

22%

21%

6%

IMPROVEMENT EXISTING Product/Service

IMPROVEMENT CUSTOMER CARE

DEVELOPMENT NEW Product/Service

FEEDBACK on COMMUNICATION to market

FEEDBACK on Overall STRATEGY

IMPROVEMENT of Existing CAMPAIGN

DEVELOPMENT of New CAMPAIGN

Other

Social approaches also help to solicit ideas from consumers to improve products or services or create new ones

Topics customers are willing to communicate on with their provider

% of respondents

willing to provide

feedback or input

Global

On which topics do you want to provide feedback or communicate with your Telecom Provider to help the organization to improve?

98%

97%

85%



A number of CSPs are already connecting to consumers to launch

new services based on their input

25

EE engaged with consumerson its Orange brand to co-create the clone phone1

EE needed inspirational mobile service ideas that people would love

EE collaborated directly with their customers and experts outside of their own field for more than six weeks to co-create the clone phone

Telenet developed a mobile TVApp with support customers2

Telenet invited users to

participate in the development

of Yelo, an application for digital

TV on mobile devices

Participants were recruited to

join a three-week closed pre-

launch community to allow

collaboration on improvements

http://www.inc.com/diane-hessan/mobile-giant-

used-consumer-collaboration-to-innovate.html

http://www.insites.

eu/researchcommunities/telenet/yelo-community.aspx

China Telecom analyses insightfrom consumers to envision anddevelop new services3

An innovation platform enables

marketing teams connect to

consumers to gather new

intelligence directly from con-

sumers to launch new services

Publication of the first idea a mere

ten minutes after launch

http://www.businesstimes.com.sg/sites/

businesstimes.com.sg/files/China%20Telecom.pdf



However most CSPs don’t yet get social, only a third of the respondents

feel their provider uses social media effectively to engage with them

26

10% 25%

11% 27%

13% 31%

14% 32%

23% 38%My Telecom Provider allows me MULTIPLE

WAYS to interact and communicate with them

My Telecom provider LISTENS TO ME and

collects the right amount of information to meet

my communication needs

My Telecom Provider USES THE INFORMATION

it already has about me rather than asking me to

provide it repeatedly

My Telecom Provider enables me to provide

FEEDBACK or to provide input to develop new

communication products and services

My Telecom Provider uses SOCIAL MEDIA in an

effective way to engage with me

Strongly agree Moderately agree

of respondents agree

that CSPs use Social Media in an effective way to engage with them

Globally, only

35%

How good is your primary telecom provider in interacting with you?

Indicate to which agree/disagree with the following statements on your Primary Telecom provider?



27

Percentage underprepared

for Social Business

85%

66%

55%

Lack of a cohesive social media plan

Lack of appropriate technology

Legal and security concerns

Lack of leadership support

Concerns about inappropriate use

Competing priorities or initiatives

Difficulty measuring investment returns

64%

34%

39%

25%

15%

52%

59%

Underprepared

for the

necessary

cultural changes

Unsure about

impact of social

business over

next three years

Limited

understanding of

the business value

we intend to obtain

Challenges Telecom CxOs to

implementing a digital strategy

Lack of a cohesive social media plan and problems with measuring

ROI are the two biggest barriers to doing more in the digital space

Source IBM 213 Global C-suite study (218 telecom CxOs) –How strong is your collaboration with customers?;



28

What’s the most natural way

to initiate collaboration?

Which self-service option is

the best investment?

What channels

will deliver the

best ROI?

How can you understand

consumer frustrations even

when they don’t call about it?

What’s the weight of

consumer sentiment

gathered from social

media?

How Socialare you?

What are the best

means to get deeper

insight about your

customers?

Which elements of the customer

experience are most important for

your customers and how do you

measure those?

Questions for you



29

Thank you

Rob van den Dam

Global Communications Industry

Leader


[email protected]

www.ibm.com/iibv