Challenge: The Challenger Brand Dilemma
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Stuck in the Shadow of the Incumbent: As a new entrant, the challenger brand previously used a straightforward but uninspired pricing strategy: copying the incumbent’s (Telstra’s) tariff plans and simply discounting them by 10-15%.
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The Desire for Disruption: Leadership wanted to shake up the market with an innovative, high-impact promotion that offered a service for “FREE,” but prior attempts at innovation in the industry had resulted in disastrous network congestion due to a lack of guardrails.
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The Dual Network and Revenue Risks: Management was acutely aware that a poorly designed promotion could cause network bottlenecks or unacceptable revenue erosion if demand overwhelmed excess network capacity.
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Solution: Risk-Managed Promotional Analytics
Analytical Models was brought in to analyse usage patterns and engineer an offer that was highly compelling to consumers while remaining safe for the network:
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Revenue Impact Analysis: We assessed the baseline traffic and found that call volumes between 8 pm and midnight were low. Because this period utilised already discounted off-peak rates, making calls free during this window required minimal revenue sacrifice.
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Network Load Modelling: Working with engineering, we analysed customer location data across the network during the 8 pm to midnight window. We confirmed that the majority of traffic shifted to suburban cell sites by that hour, ensuring that city sites would not experience bottleneck congestion.
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Customer-Centric Marketing Value: The ‘yes’ Time promotion was designed to provide up to 15 or 20 minutes of free on-net calls per call. This resonated deeply with the target younger demographic, driving market share without placing dangerous stress on network resources.
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Outcome: A Sustainable 5-Year Market Fixture
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Market-Share Leadership: The ‘yes’ Time promotion became the mainstay of the telco’s market offering for a full five years, drastically increasing their share of the younger demographic segment.
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Network Stability: Because the traffic was distributed across suburban cells during off-peak hours, network congestion was limited to a few minor hot spots.
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Brand Transformation: Successfully shook off the “copycat” label, positioning the business as an innovative and exciting challenger brand.
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