ALLTEL Communications

Innovative marketing speeds convergence of wireless & wireline services

Discovery

A fast-growing Fortune 500 company, ALLTEL provides telecommunications services to 5.6 million customers throughout the Southeast and Midwest. When company executives recently decided to converge its local phone service with wireless, Internet and long distance services, they needed a way to identify the best customers and choicest markets for building a combined wireless and wireline network. And they needed to do so while being mindful of government restrictions against using phone customer data to market other communications services.

ALLTEL wanted to build a telecommunications network with the capability of offering converged communications and data services to customers in previously distinct wireless and wireline markets. They needed to target current wireline and wireless customers to cross-sell local phone service, wireless service, long distance, paging and Internet access. Wireless markets had to be ranked for wireline expansion, and marketing campaigns offering bundled services for business and residential customers in key communities had to be developed.

Strategy

Claritas provided those capabilities with geodemographic tools, proprietary surveys and in-depth market analysis. Its industry-specific survey, Convergence Audit, provided detailed profiles of consumers who use long distance, paging, Internet and cell phone services.

The PRIZM segmentation system classified ALLTEL customers by consumer demographic and lifestyle characteristics into target groups for the various telephony services, based on the PRIZM profile for each trading area. As one of the new breed of competitive local exchange carriers (CLECs), ALLTEL employed Claritas' marketing analysis system to analyze its wireless trading areas and rank those markets with the highest potential for buying wireline services.

Implementation

Using Convergence Audit, ALLTEL analyzed consumer consumption of telephony services by product, level of spending and PRIZM lifestyle type. The company created a spreadsheet that indicated which clusters spent more than $50 monthly on local phone service, made $45-65 worth of cellular phone calls each month and used pagers, the Internet and other telephone services. Compass software scored each PRIZM cluster on usage rates and the amount of money spent on the various telcom services. Finally, it targeted clusters with the best prospects for ALLTEL's bundled services: surprisingly, middle-class types like "Mobility Blues", "Starter Families" and "Mid-City Mix" as well as more affluent segments such as "Executive Suites" and "Winner's Circle."

ALLTEL identified 19 of 62 PRIZM clusters that are fertile ground for a converged wireless-wireline network. The company then used Compass to rank its wireless markets by concentration of target group clusters. In high-ranking markets like Little Rock, AR; Charlotte, NC; and Jacksonville, FL. ALLTEL conducted direct marketing campaigns of bundled services to wireless customers. "In two days, we prioritized 54 markets so we had a battle plan on where to go first," says Mickey Freeman, staff manager of strategic marketing. "Claritas gave us a common logic to look at the similarities and differences of each of our markets."

Measurement

Equipped with these in-depth market profiles and maps, ALLTEL last year began building its network of the future, offering bundled services in market after market – all from one telecom company, all on one bill.

ALLTEL has seen impressive growth in top-ranked areas. In Little Rock, the number of wireless business customers who signed up for bundled wireline services rose from 0 to 5 percent in its first ten months of operation. Marketers predict that revenues from bundled services in the residential market will be even more dramatic after initiating a combined direct-mail and telemarketing campaign.

ALLTEL managers today describe Claritas software as their major tool for expansion. It's helped decrease the time needed to gather demographic and lifestyle information about potential markets by more than half. And it's reduced the marketing costs for reaching targeted consumers by 20-25 percent, according to Mickey Freeman. "This is just a better way of finding new customers," he observes. "It works beautifully."