Low customer active rates have been a continual challenge across the mobile money industry. As of June 2012, the industry-wide customer active rate stood at just 22%. This problem can have a number of causes including low awareness of service, negative registration experience and lack of understanding of how to use the service. A paper by Neil Davidson and Yasmina McCarty titled ‘Driving Customer Usage of Mobile Money for the Unbanked’ lays out the many causes of the customer activation struggle.
Whilst the positive effects of increasing your active customer base are plentiful, the tactics by which to achieve this are not always obvious for operators. A recent blog post by Phil Levin highlights that one potential key to achieving high customer active rates is to encourage customers to transact at the point of registration. The 3 tactics that he highlights to achieve this are (1) place incentives for your agents on customer activity, not just registration (2) train agents how to educate and convince customers, and (3) experiment with promotions at the point of registration.
In this blog post, we want to highlight a different tactic that an operator is successfully using to overcome the challenge of low customer active rates.
Post-launch, this African operator heavily prioritised customer registration by financially incentivising field agents to register as many customers as possible. Customer activation on the other hand proved more challenging. By the end of the first year, their focus on registration meant that whilst the number of registered customers grew, only a small percentage were actually active. Registered inactive customers not only cost the operator dearly, but also represent lost revenue opportunity.
Two years following the launch, the operator re- prioritised and focused on increasing its customer active rate; the operator has since experienced double digit growth in active customers. Here is how they did it.
Following the strategic decision to focus on activation, they decided to set up a dedicated outbound call-centre, to reach out to its inactive, registered mobile money customers with a balance in their mobile money accounts. Trained callers seek to both build relationships of trust with the registered customers they reach-out to, as well as identify opportunities to educate customers.
The operator has experienced success with this strategy, reactivating 80% of those inactive customers called on a short-term basis – defined as performing one transaction in the month following the call. And 30% of those called by call-centre agents remained long-term active customers – transacting at least once a month for the 3 months following the call.
Whilst the dedicated outbound call-centre has admittedly been an expensive investment for the operator, it has successfully activated tens of thousands of its registered customers and therefore helped generate increased revenues. This tactic is just one element of the operator’s broader strategy to address the root causes of low customer active rates including addressing market awareness, agent training and liquidity.
If you have a story to share about tactics used to successfully activate mobile money customers please comment below or send an email to [email protected], we’d like to hear your stories.