Elion cuts churn, increases ARPU and ROI with SAS® Marketing Automation

When deregulation led to increased competition in the Estonian telecommunications market, Elion, the country's largest communications provider, witnessed a decline in its customer base. With help from SAS® Marketing Automation, Elion reversed that trend. By strengthening cross-sell and up-sell capabilities and refining and automating campaign management processes, Elion regained its edge over competing providers.

And as customer loyalty grew, so did average revenue per user (ARPU) – by 9 percent. Meanwhile, marketing budgets fell by nearly 40 percent, yet campaign results grew to twice Elion's previous levels.

Using an integrated solution for predictive modeling, marketing automation and digital marketing, the system helps the Elion marketing team prepare data for modeling with SAS® Enterprise Miner and feed information into SAS Marketing Automation to instantly launch campaigns using SAS® Digital Marketing.

"The efficiency we've gained allows us to develop more offers and campaigns and the marketing project managers can handle campaigns by themselves. It has definitely given us an edge," says Arti Ots, Elion's Chief Marketing Officer.

Justifying marketing campaign costs is easier now that the company can accurately track data on prior campaign costs and profits. Results from SAS make decisions rational and rational decisions make money.
Arti Ots, Elion

Arti Ots
Chief Marketing Officer

A targeted, automated approach In addition to being Estonia's largest communications provider, Elion is the market leader in fixed phone-line networks and Internet and data communication services. Elion boasts a growing business in the digital television market and it owns Estonia's most popular Internet search engine, NETI, and Internet portal, hot.ee.

"We have a mature market in Estonia, and the competition is fierce," says Ots. "Therefore, the market conditions demand that our team exactly understand what works in the market and what doesn't. We have moved from a mass marketing approach to a targeted and automated campaign approach, using the most efficient channels.

"Providing the right information to customer service agents has contributed to our success in recent years. We are moving towards having up-to-date information on every customer and being able to know what offers are best for each of them. The system is continually updating itself to provide more value to customers."

2-1 ratio for campaign ROI

Ots says the communications company regularly runs churn and customer lifecycle campaigns, and tests results against control groups to understand campaign effectiveness, costs and profitability. "On average the company is seeing a 2-to-1 return on its campaign investments and has seen an increase in ARPU of 9 percent. With multiple campaigns running every day, our marketing team now has the tools to implement campaigns instantly, as well as provide campaign performance updates to the system to help inform and improve future campaign efforts."

According to Janek Leis, Analytical CRM Manager, Elion's data quality and modeling capabilities have improved dramatically since his team began using SAS. He points to a recent video-on-demand campaign that increased uptake for a campaign offer.

Leis says the SAS customer segmentation capabilities have allowed his team to experiment with offers and delivery channels. In one campaign, the team sent an e-mail offer to customers segmented by gender, using a different creative treatment for each gender segment. It performed five times better than the same campaign that was sent to a control group, in which the males received the female creative and vice versa. Leis says the experiment emphasized his group's approach to segment marketing. The team is employing similar tests with other market demographic segments.

"We understand that it's important to sell products in a way that is relevant to customers and not treat them all the same way. If a customer contacts our call center, the salespeople can see what the next-best offer would be for that person. And, thanks to SAS Marketing Automation, we can easily do customer lifecycle campaigns" explains Leis. "SAS has also given us the means to know what customers have a high probability to churn. We now understand them better, how best to provide service to them and what kind of retention programs will or will not work."

'Rational decisions make money'

Business Analyst Priit Leemet says client satisfaction is a priority for Elion. His team measures net promoter scores which provide insight into customer attitudes and satisfaction. "The net promoter score is higher than it used to be; it has increased significantly in recent years," explains Leemet. "SAS helps us know which campaigns to push to loyal and not-so-loyal customers. We can see that the offers have a positive impact. We can actually see how satisfaction relates to ARPU."

Leemet adds that "the company reduced churn by 10 percent, through improved customer service and targeted retention offers, compared to control groups that did not receive retention offers."

"Due to the efficiencies enabled by SAS, we have also reduced our marketing budget by 30 to 40 percent and achieved twice the result of previous marketing efforts," adds Ots. "Justifying marketing campaign costs is easier now that the company can accurately track data on prior campaign costs and profits. Results from SAS make decisions rational and rational decisions make money."

"The biggest difference between SAS and other vendors is that SAS is always focused on a customer's business results," continues Ots. "SAS provides solutions, not just software. That is the innovative thing to do; to really understand a customer's business, deliver real business results and provide value-added support rather than just selling software."

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Challenge

Elion experienced higher churn rates after deregulation of the telecommunications market increased competitive pressures

Solution

Benefits

  • A 2-1 ratio of return on its campaign investments
  • Increased its ARPU by 9 percent
  • Cut churn by 10 percent compared to control groups that did not receive retention offers
  • Reduced marketing budget by 30-40 percent; achieved twice the result of previous marketing efforts

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