MTN Nigeria is developing a new social pricing model to improve customer retention and incremental revenue through social network optimisation and dynamic social pricing.
The solution was recently showcased at the recent INSNA Sunbelt 2016 convention in Newport Beach, California, where it attracted considerable interest.
The African-centric Telecoms Social Pricing Algorithm recognises differences in the cultures of emerging market customers, especially those in West and Central Africa, and customers in other areas. Typically emerging markets are more collectivist societies where interpersonal ties define the organic solidarity of their communal culture.
The nature of interactions between social cliques and the ability to leverage these to trigger telecoms services usage and sustain longer customers’ activity ratios using special preferential in-community tariffs is key to the development. A study has shown that using a dynamic model of network-based social pricing, which is significantly different from the generic friends-and-family tariffing principles normally deployed in emerging markets, can measurably improve revenue and customer retention.
The model was developed by Olubayo Adekanmbi, a combined PhD scholar at City University, London and TIAS Business School, the Netherlands. According to the INSNA abstract report, Adekanmbi’s model “has opened a new frontier in how telecommunication operators in emerging market can effectively operationalise a dual strategy of customer retention and revenue growth through social network optimisation and a dynamic social pricing model”.
Adekanmbi, Chief Marketing and Strategy Officer of MTN Telecommunication Nigeria, is currently on a one-year sabbatical to develop this research further. He is a multiple award winner in his professional and academic lives and has been awarded the prestigious MTN Yello Star award for his outstanding leadership skills.
INSNA is the professional association for researchers interested in social network analysis. The association is a non-profit organization incorporated in the state of Delaware and founded by Barry Wellman in 1978. Developing Telecoms is planning to publish a more detailed description of the research soon.