By Alon Werber

In these cash-conscious times, wireless carriers need to focus their efforts on more effectively marketing to, and affecting the behavior of, their prepaid customers to retain customers and drive up levels of usage.

Traditionally, prepaid plans have been strongly promoted by carriers to immigrants, youngsters and low-income customers who needed to gain control over their spending.

Tough economic times enticed many post-paid customers to cut costs and shift to cheaper prepaid plans.

The popularity of prepaid has continued to grow because of user-favorable government policies which reduced the number of contracts sold, as well as the ability to keep the same number when switching between carriers.

ARPU there?
Increasingly, the prepaid market is now expanding beyond the traditional segments.

Given the size and revenue potential of this market, targeting this group of subscribers represents a hugely lucrative, yet under-utilized opportunity to drive average revenue per user (ARPU) and reduce churn.

If carried out in a targeted and timely manner, addressing prepaid customers has proven to increase overall revenues by as much as 6-8 percent. Tactics that entice customers to top-up when their balance is low and the revival of silent customers with contextual offers can pay huge dividends if presented at exactly the right time and within context.

The challenge to retain customers is, however, particularly demanding in the prepaid sector ? it is a notoriously price-sensitive sector and easy for customers to switch providers.

Carriers should entice customers such as high-churn risk subscribers and high value subscribers to top-up and talk more through relevant incentives ? closely tied to customers? behavior and preferences. 

Know your audience
In the past, lack of connected systems between internal departments meant that carriers could not act quickly and automatically upon pertinent data, presenting marketers with a challenge in trying to segment and deliver offers which meet users? needs in a timely manner.

However, technology is now available to allow carriers to target subscribers with personalized offers in real time to entice them to top up more frequently, increase usage and minimize the all-important silent periods.

There are tactics which can be used to great effect if the timing and offer presented are right.

We undertook our own analysis of subscribers? behavior with a European tier 1 carrier, which revealed that more than 80 percent of subscribers who did not talk for 14 days became dormant or inactive users.
The same carrier was able to reduce the average time between recharges in high-risk customers by 30 percent and even more important ? to reduce the average time elapsed from the account balances reaching zero until the next recharge by 50 percent through ongoing interaction aimed at changing recharge patterns and stimulating usage.

The key was to identify high-churn risk subscribers and encourage them to recharge more frequently through the right retention offer. A few examples below:

1. Carriers could provide offers such as ?if you recharge more than $30 get 10 percent immediate bonus and 20 percent discount on calls to a relevant destination.?

2. Benefits might also relate to other lines of business, e.g. top-up $15 and get two ringtones for free.

3. Carriers can also automatically target subscribers who have not responded to previous incentives, and target them with a more enticing offer, for example: ?recharge more than $30 and get 10 percent bonus on all recharges during the next month.? 

These activities encourage subscribers to frequently recharge, whilst promoting other services, giving subscribers an incentive to remain active.

Context is everything
Carriers need to work at ensuring that they target the subscriber with relevant offers at the right time. It is essential to ensure subscribers do not reach zero balance, as each day that passes from this point means the subscriber could be switching provider.

The second factor that carriers should study is the date of the last call.

This is extremely important because as there is no contract, there is no proactive activity involved and subscribers do not need to notify the carrier if they churn. That is the main reason why so many prepaid subscribers become dormant.

The right offer can make the difference between retaining a customer or failing to act and losing them to a competitor.

To summarize, we believe that targeted and tailored offers in the prepaid sector can pay real dividends.

What is more, the means are now there for carriers to harness data on their subscribers? behavior and implement marketing offers in real time based on their preferences, ensuring customer satisfaction and minimizing the risk of churn.

Alon Werber is vice president of marketing and business development at Pontis, Glil Yam, Israel. Reach him at .