Barriers to Customer Activation: A case study from MTN Uganda

The MMU programme is funded by a grant from the Bill & Melinda Gates Foundation

Restricted - Confidential Information

© GSMA 2009 June 2011 Singapore

M. Yasmina McCarty, MMU ManagerJune 2011, Singapore

Barriers to Customer Activation:A case study from MTN Uganda

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Agenda

Project background Customer journey framework Research results

– Non users – barriers to activation– Active users – areas of satisfaction / dissatisfaction– Inactive users – what caused inactivity

Conclusions

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Project background: MTN Uganda

MTN Uganda launched their product “Mobile Money” in 2009– Format: E-wallet service on STK– Services offered: Money transfer, airtime topup, bill pay (water, cable TV), school fees– Registration process: Registration is a 2 step process 1) ID + application form submitted

to agent or field agent 2) application vetted by back office and then account activated Today MTN Uganda boasts one of the largest mobile money subscriber base with

1.5 million registered users

MTN wanted to drive customer activation, both continuing to sign up new customers as well as encourage existing customers to be more active on the platform

MMU worked with MTN to identify optimal marketing strategies for customer activation by better understanding customer segments

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Project background: Research objectives

MTN Uganda & MMU commissioned Synovate to conduct qualitative research to: Identify high potential segments of nonusers to be activated

– Determine non users barriers to trial– Identify knowledge gaps which discourage trial & areas of distrust which may limit use

Identify the areas of dissatisfaction and satisfaction for users– Platform - reliability, ease of use, and price– Usage experience - agent, user interface, and customer care

Identify what limits inactive / lapsed users from being active on the platform Identify formal/informal competitors that consumers prefer over MTN Mobile Money

and understand the value propositionResearch was followed by action planning to implement findings

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Project background: Consumer segments

Users Non users

Active Inactive Survivors Trendies Traders Progressives

Urban

Rural

Prior to conducting the research, market segments were selected based on existing customer behaviours as well as hypothesis on customer behaviours

All segmentation was aligned with core marketing strategies so results would be directly applicable

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Customer journey framework

Unaware Awareness Understanding Knowledge Trial Regular Use

Customer has heard of mobile money and knows what it does

Customer understands how mobile money could be useful to them

Customer knows the steps necessary to transact

Customer has never heard of mobile money

Customer tries the service

Customer habitually uses the mobile money service

MMU & MTN Uganda had strong hypothesis about the customer journey and where customers might be getting bogged down

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Non users - Awareness & understanding of Mobile Money

Awareness was very high & had been created through different sources– Advertisements through media – TV, radio, billboards, newspapers– From friends and relatives who are already registered – Through promotional activities– Field agents who were educating people– Receiving messages from MTN– MTN Mobile Money trucks

Users and nonusers alike had a clear understanding of what the service was for:– It’s a fast and easy way of sending and receiving money– It’s a cheaper way to transact compared to the banks– You can save and buy airtime with it– You can make payments with it, e.g. paying water bills

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Survivors Trendies Traders Progressives

Easy way of banking money

Exchange of money using phones

Fast way to exchange money

Safe way of keeping money

Money on the phone

Service that helps one send money

A small bank Fast and

convenient way to send and receive

Banking services from MTN

Money transfer Convenient

money exchange

Non users – Top of mind perceptions

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Non users – Knowledge as a barrier to using mobile money

Non users were aware of Mobile Money and understood the main use of the service However non users did not know how Mobile Money works There was confusion about how the concept actually works i.e. what is digital money,

what does the agent do, what does the operator do, what does the consumer need to do on their mobile, what happens if the transaction goes wrong, etc.

“I do not trust it because I do not know how the money will reach the other person.” Survivors, non user

“Here in the deep village not many people know much about so they should sensitize us more on how it works.” Traders, non user

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Survivors Trendies Traders Progressives

Trust – yet to trust the whole process of sending money via phones

Many questions on the registration form – complicated to register

Costs are not fixed – they charge sender and receiver

Long procedure for registrations – especially ID requirement (rural have more difficulty)

Stability of network not very reliable

Line never getting activated

Fee charges are high

Poor network coverage therefore they don’t trust the system

So far the banks work for them and they are more reliable

Charges are high for sending and receiving

They can use alternative means through banks which they trust more

Registration process is too long and tedious - asks for too much information

They do not find it trustworthy when sending large amount of money – agents located insecure places

Non users - Barriers to using mobile money

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Active users – Customer journey

High awareness: Users were aware the product was for exchange of money using the phone, like a bank for transactions – even savings

Clear understanding: The main usage mentioned was to send and receive money, other usages mentioned include savings (e-wallet perceived as a short term secure storage for money), buying airtime, purchasing commodities, paying water bills, Unforeseen emergencies / problems that require money immediately

Good knowledge: Learnt to use the service from agents who helped them register, friends/relatives who already knew how to use it, MTN service centres and through the STK menu, which some found to be user friendly

Activation: Although consumers had first learned about Mobile Money from a variety of advertising mediums, they only become convinced to take action and register when prompted by a person – the driver of activation was either DST or a friend compelling them to sign up

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Active Users – Experience with Mobile Money

Area of satisfaction Areas of dissatisfaction Easy to use the services Its convenient as it has saves one time

and travel cost Some find it cheaper than other modes

of money transfer like Western Union

Agents not having enough money Network system not being reliable -

going off and not being able to transact In rural area the agents seem not be

well skilled and trained Few MTN service / agent centers in

rural areas Unsafe location for agents making one

feel unsafe to transact

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Inactive users

MNOs have diverse segments within inactives i.e. those who don’t understand the service, don’t need the service, grew frustrated and stopped using the service, etc.

MTN conducted research with inactives who knew how to use the service but had stopped transacting for some reason

The areas of complaints for inactives mirrored complaints from actives:

“The system was always down when I wanted to withdraw money so I decided to stop as I got disappointed.” Inactive / lapsed, Kampala

– Network down time when one wants to withdraw money - this has frustrated them the most, especially when they urgently needed the money

– Disappointments from agents when one wants to withdraw money and they do not have

– Some found it to be expensive to transact – high fees for transactions

– Transaction limit of 1 million shillings is perceived not to be enough– Poor customer care services in the rural area from the agents and service centres

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Trendies Traders Survivors Progressive

Western Union Its convenient and

has wide branch network coverage

Its more efficient – though expensive

Banks More secure in

dealing with large amounts (receiving)

Use ATM which are everywhere to withdraw anyway – more secure

Buses / Taxi No network

problems – assured money sent

No need for registration matters

Convenient – can send at any time night & day

No charges

Bank Friends They do not charge

any fee They are more

trustworthy

Friends / relatives More reliable and

trustworthy than MM They do not charge

fees You can hold them

accountable if money not sent / received

Convenient – no queues, send at anytime even at night

Banks - Higher security guaranteed

Airtime transfer - No charges

Bus / Taxi - They are reliable

Banks More secure and

reliable Better customer care

services Has interest rates on

savings They are in more

secure locations compared to agents

Bus / Taxi drivers - They are more secure and assured money will be sent and received

Post office - One gets feedback once money has been received

Alternatives to Mobile Money – Non users

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Active users Inactive users

Banks They are more secure than mobile money –

when dealing with large amounts No withdrawal charges using ATMs Used when one wants to withdraw large

amount of money which mobile money has a limit

Friends / relatives - They are more trustworthy and reliable

Western Union - They are more secure as they give feedback / follow up – though more expensive

Bus - Convenient as there is no line for queuing to send money

Banks Convenient to receive money from account

and use ATM to withdraw anywhere and anytime

Less questions asked about details of sending and receiving

Bus - More convenient and they do not charge high fees

Airtime - No charges for person receiving and selling – one gets the exact amount of money sent

Alternatives to Mobile Money – Actives & Inactives

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Non users – Requested improvements to MTN Uganda

Education: Sensitize / educate people more on how mobile money works especially in the rural areas

Registration– Make registration process easier with less formal requirements of filling long forms with a lot of

information – should be straight forward– Activation process should be improved to avoid one from waiting for a long time before using the

services Agents

– Ensure agents are well trained so as to be able to assist the customers all the time–good customer– Ensure agents always have enough money at all times to avoid inconveniences– Agents should be in secure locations where one can feel safe when transacting or withdrawing

money– Increase the number of agent outlets especially in the rural areas

Network: Improve on the network system to ensure one can always get their money Product features: Increase maximum transaction amount of sending and receiving money

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Active Users – Requested improvements

Education - Sensitisation of the rural people on how to go about the process Registration & Customer care

– Train agents to know everything about the activation / registration process so that when they are questioned they can be able to give valid reasons to customers.

– Should have reliable systems that will speed up the activation process – have back up systems if necessary when system is down

– Agents should be equipped with all necessary equipments at registration points to ensure fast registration process e.g. having photocopiers machines

– Should have more mobile centres and agents outlets for convenience so as to reduce on the number of long queues on only few outlets

Product features– Network: Improve on the network system to ensure that its always up and running when one wants

to perform a transaction– Price: Reduce on charges for both sending and receiving money– Trnx limits: Increase on the amount of money someone can save, send and receive

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Conclusions – Barriers to activation

For non users, there was high awareness, good understanding but a clear gap in knowledge levels on how Mobile Money works which kept them from registering for Mobile Money

Additionally, there were specific barriers to activation which varied by segment For users and inactives, there was common complaints that required urgent attention

– Network down time– Agent illiquidity– Customer care

These issues created negative word-of-mouth for non users and if left unaddressed, could lead active users to becoming inactive

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Conclusions – MTN next steps

Knowledge – Develop an ATL education campaign on the “how-to”– Improve training & monitoring of DSTs for clearer customer communication according to

segment needs Agent

– Improve agent shop fascia & merchandising to portray a more secure environment– Train agents on customer care processes, possibly introduce exclusive agent help line– Improve agent liquidity, especially in rural areas– Open more agent points in rural areas

Registration / Activation – improve time lag between these two steps, especially for rural consumers

The MMU programme is funded by a grant from the Bill & Melinda Gates Foundation



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Economy & Finance

Barriers to Customer Activation: A case study from MTN Uganda