October 23, 2014 / 5:36 PM / 5 years ago

MTN S.Africa uses tailor-made promotions to boost telecoms sales

JOHANNESBURG, Oct 23 (Reuters) - Top African telecoms provider MTN said it had boosted sales by adding personalised promotions to credit balance inquiries, allowing it to cut ad spending by 80 percent in South Africa, one of its biggest markets.

MTN South Africa said it was spending nearly nothing to advertise on traditional media such as television and radio, compared with 300 million rand ($27.4 million) last year.

“It’s a sin how much we’ve been spending on above-the-line advertising if you measure the kind of response that we are getting,” Larry Annetts, chief marketing officer for MTN’s second-biggest market, told Reuters.

Four in five of MTN’s 26.7 million South African subscribers are pre-paid users of mobile voice and data services, and they often send messages to the provider to inquire about their credit balances. MTN now responds with the amount and with an additional line that offers other targeted services.

Customers can now top up their credit with bundles not available on the shelf, because MTN sees how much they have in their mobile wallet and provides them with tailor-made offers.

Annetts said the company promoted a ringback tone of a popular South Africa song using traditional ads for two weeks and received 2,000 downloads.

The number jumped to 1.65 million when it experimented with the new form of advertising over a similar period. In future, it plans to tempt users with songs from its music app that depend on the kind of tunes they already have in their albums.

The MTN Group, which has operations in nearly two dozen countries in Africa and the Middle East, on Thursday reported a 2 percent growth in total users in the three months to end-September, bringing its customer base to 219 million users.

It slashed its forecast for Nigerian subscriber growth, however, sending its shares sliding.

Data revenue across the group rose 34 percent so far this year, contributing nearly 18 percent of total revenue.

MTN said it was working with big data analysis companies to identify customers’ needs in order to push even more personalised offers. The potential is so huge that other companies have expressed an interest in using the platform for their own advertising, Annetts said.

1 US dollar = 10.9546 South African rand editing by Jane Baird

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