Alltel Takes a Lifecycle Look at Customers

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Marketing
Marketing

The wireless space in the U.S. is a battleground for mobile carriers. With penetration set to reach 90 percent by the end of 2008, there aren't many more customers to acquire. Most companies instead are focused on luring customers away from competitors, then using retention and loyalty efforts to keep them. Alltel Wireless, for example, offers more than just cool products; it has both strategy and tactics in place to build long-term relationships with customers.

Alltel is currently the 5th largest wireless provider in the U.S. with 13 million customers in 34 states. Four years ago, the company admittedly had no real brand identity, and embarked on a revitalization strategy built around customers. "Being the customer's advocate was our goal," says Lesa Handly, senior vice president of customer strategies. The company created a "Reasons to Believe in Alltel" mantra that focuses on choice, control, and convenience for customers.

The company began listening to customers to find out which products and customer services they were most interested in. As a result, the company created its MyCircle product in 2006, where customers can call up to 20 people in any network for free, as well as a flexible rate plan that can be changed without extending a customer's contract. Besides products, the company decided to act as a customer's advocate, staying proactively connected to customers. Working with Acxiom, Alltel created a customer lifecycle management program to be more relevant and valuable to new and existing customers. "We want to be more relevant, timely, and effective with our efforts," says Chuck Toomer, Alltel's vice president of marketing.

The company created a robust database in 2007 that combined Alltel's customer and prospect information with demographic and household data from Acxiom. With this data, Alltel creates customized direct marketing campaigns to provide the right message at the right point in the lifecycle on the right platform, says Tara Llewellyn, Alltel's director of campaign management. With its campaign lifecycle management engine Alltel automatically runs approximately 15 versions of a campaign each day via text, email, direct mail, and phone channels. "We're communicating, not just trying to sell," she says.

For example, new customers receive a welcome text message, providing customers with an opportunity to ask questions about their new services and test out the texting features. Then at the 30- and 45-day marks, customers are divided into segments and sent different messages. Some customers may get a text reminding them to activate their MyCircle numbers, while others may be prompted register for online customer service, or confirm their rate plan. If Llewellyn sees that customers do not use text features, her team will send an email communication instead. "We now communicate with customers 285 percent more than before," Llewellyn says. This improved amount of relevant communications helps Alltel stay top-of-mind with customers.

The consistency of the message is also important, Handly adds. "The overarching brand is something we like to articulate clearly," she says. "We keep the same brand elements across channels, but also personalize the message to the unique characteristics of customers."

So far the results have been positive. Alltel has seen a 265 percent increase in incremental customer additions tied to direct marketing efforts for both new and existing customers. And gross take rates - the number of people who took action based on a campaign - typically exceed 6 percent per campaign, compared to an industry average of 1 percent.

Next steps include refining the customer communications strategy. "If we can figure out the right balance of communications, it could really have an impact," both on customer satisfaction and revenue, Toomer says. In addition, Toomer wants to use the enhanced customer intelligence to gain a deeper understanding of which customers may be about to churn, in order to be proactive earlier.

These plans all fit into Alltel's three-legged strategy, says Handly. "We want to provide a compelling message, a compelling product, and embrace a great customer experience," she says. "With those three pieces working, we've really got some momentum."

It will be interesting to see how long this momentum lasts. Alltel is in the process of merging with Verizon Wireless, a transaction due to close by the end of the year. How the company's customer strategy fits in with Verizon Wireless' approach will be something to watch for.

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