Optus, Medibank sharpen marketing efforts with predictive analytics

Relevant marketing can overcome customer privacy concerns

 Alex Burrows, Optus director of scientific marketing and analytics
Alex Burrows, Optus director of scientific marketing and analytics

Customers are happy for businesses to use their data for marketing so long as it’s relevant, according to data scientists at Optus and Medibank.

Optus has worked to build trust with its telecom customers, said Alex Burrows, director of scientific marketing and analytics during the ADMA Global Forum in Sydney (pictured). “If customers trust us, I think they’re a lot more open to relevant offers.”

Optus targets customers who use their phones abroad with offers for roaming packages. Also, the telco targets customers who exceed their plan’s caps by $100 with information about plans that can reduce bill shock.

Customers are open to these kinds of offers because they are specific to their needs, said Burrows.

Relevance is the key, agreed Athi Singh, head of customer analytics for health insurance provider, Medibank.

“It has to be relevant. It has to be timely,” he said. The message should also be sent over the channel preferred by the customer.

Like Optus, Medibank uses analytics to predict customer attrition as well as to sell additional products. The company has deployed SAS to automate targeting of offers to customers.

Sometimes, the best way to keep a customer is to recommend a downgrade to a less expensive plan, Singh said.

“That’s a great experience to have,” he said. It tells the customer that “we’re not worried about the immediate impact on our profitability because we’re selling you a cheaper product. It’s more about [saying] you’re not getting value from your product, so we should downgrade you to keep you longer.”

Use of customer analytics by Optus has improved its Net Promoter Score and the telco is seeing improved results to churn, a measurement of customer turnover, said Burrows.

“Our churn rates are the lowest they’ve been in seven years,” he claimed.

Over the last 12 months, the Optus data analytics team has focused on retention of its existing customer base, but in the coming year will turn to acquiring new customers and grow market share, Burrows continued.

“We have a lot of data on our customers and we can extrapolate that to prospects.”

Each company official made clear they’re very aware of customer and regulator concerns about privacy. Optus only collects data with the customer’s consent and does not sell it onto third parties, Burrows said.

“There are a lot of vendors that come and talk to you and say you should be selling data,” he said. “But I think customers are a lot more wary of how you use their information.”

Adam Bender covers digital marketing and emerging technology for CMO and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

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