THE 2002 STUDENT DIRECT MARKETING COMPETITION

 

THE TASK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

© THE INSTITUTE OF DIRECT MARKETING, SEPTEMBER 2001

Background

 

The UK mobile phone industry has experienced phenomenal growth in recent years. All operators have implemented fierce acquisition strategies to gain as many customers as possible. According to Oftel, over 76% of the UK population now owns a mobile phone.

 

The rate of churn (customers leaving existing network) between mobile companies is estimated between 20% and 35%. As a consequence of this companies are now reviewing their strategies to focus on customer retention. Acquisition of new customers is still important but focus is shifting to providing their current customers with added value services. By encouraging customers to use these services, this should improve retention rates and therefore generate incremental revenue.

 

Orange has developed a range of services, which will add new dimensions to their mobile phone offering. The services will help Orange to differentiate them from the competition.

 

The services available range from information on football scores, sports and news headlines, stock market information which can be sent via text message alerts. Orange customers can also receive weather forecasts, traffic updates and UK club guides via a Voice Media service. Text messages can also be sent and received whilst abroad. Wirefree gaming is currently available on Orange (available on WAP phones only) with a selection of WAP and text message games to choose from.

 

The Task

 

As Orange’s direct marketing agency, you have been asked to review Orange’s current marketing activities and create a new direct marketing strategy that will use this range of services to retain and grow the Orange customer base.

 

Orange would like to reduce the number of customers who move to other networks to 15% and gain 125,000 new customers in year 1. (With recommendations on the number of customers that can be acquired in years 2 and 3).

 

The strategy should ensure all current customers are aware of the services available and that they are educated on how to use them. It should also consider how these services could be used to attract new customers to Orange.

 

The proposed activity will need to focus on three broad markets, new customers to the network, existing pay monthly customers and existing pay as you go customers.

 

 

 

The strategy should include:

 

Retention: existing customers (pay monthly)

 

·         Implementation of a testing programme in order to identify the most appropriate segments on the existing customer database – and test communication of the relevant services. (Include any researching methods that could be used).

 

·         Development of the testing programme to roll out a full retention strategy to all customers to maximise retention levels.

 

·         Detailed communications plan with consideration of both on and offline media routes.

 

Retention: existing customers (pay as you go)

 

·         The value added services are currently only available to customers on a pay monthly Service Plan. Provide a detailed plan as to how these services can be used to encourage migration of existing customers from pay as you go to pay monthly including both segmentation and targeting.

 

Acquisition: new customers

 

·         An acquisition strategy to show how the new value added services can be promoted to acquire new customers (key learnings from the testing strategy can be used i.e. identification of target audiences). Include details on how the wirefreeÔ gaming can be launched into the mobile market with recommendations on the appropriate target markets etc. Incorporate a communications and media plan for all acquisition activity, incorporating both on and offline activity.

 

Database

 

·         Include recommendations as to existing and future database management – with consideration as to how this can be used to drive communications going forward.

 

Your proposal should also include:

·         Consideration of fulfilment and response handling for the marketing activities

·         A creative brief, which may include samples

·         Anticipated response rates for all activity

·         Timings for all activity in year 1

 

Budget

Year 1: £2,000,000

Year 2: £1,750,000

Year 3: £1,500,000

 

Your proposal should concentrate on activity for year 1 with recommendations on how the budget would be allocated for years 2 and 3.