Telecommunication marketing management

1. Marketing
Understand Act
Marketing Management for Telecom
Nibras Hussein Mohammed ‒ Marketing PhD

2. 2
Marketing - Sales Markets
Differentiation according to 3 sales markets and the participating
partners
Marketing
B - to - B
Business-to-Business-
Marketing
(company customer)
Marketing of one
company to another
company
(i.e. production machines)
C - to - C
Customer-to-
Customer-Marketing
Marketing of a private
household to another
private household
(i.e. private sales on ebay)
B - to - C
Business-to-Customer-
Marketing
(private customer business)
Marketing of a
company
to a private house old
(consumption goods)

3. 3
Decision-making units in B2B markets
• User
– These are the people who will use the end product.
– For instance, the office staff who will use the photocopier.
• Influencer
– These are the people whose opinion is sought in the purchase of the new product.
– For instance, the office supervisor may have an opinion on what the photocopier should be able
to do.
• Decider
– This is the person who makes the decision which photocopier to buy.
– This person is likely to be a senior manager.
• Buyer
– This is the person who looks for the most suitable products and handles meetings with suppliers.
• Gatekeeper
– This may be the receptionist of the secretary to the decider or influencer.
– Gatekeepers are powerful because they are often the people who answer the phone or who open
the mail on behalf of senior managers, and they can decide which suppliers reach the decision
maker.

4. 4
What influences B2B customers
• B2B customers need to make the best decision on behalf of the organisation.
• Unlike B2C customers, who may decide to buy a bar of chocolate on impulse as they go
round the supermarket because it’s the end of the working day, because they are feeling
particularly hungry, and because they are tired-out from work, B2B customers are likely to
take a long time over the decision and do their best to weigh up all the criteria.
• So they are likely to consider:
– Price
– The performance and quality of the product or service
– The reliability of the supplier
– The level of post-purchase customer service

5. 5
What Is Marketing?
Stresses Customer Satisfaction
A Philosophy
An Attitude
A Perspective
A Management
Orientation
A Set of
Activities…
Products
Distribution
Promotion
Pricing
Marketing is an organizational function
and a set of processes for creating,
communicating, and delivering value to
customers and for managing customer
relationships in ways that benefit the
organization and its stakeholders.
Employee
satisfaction Greater efforts Higher quality
Customer
satisfaction
Growth and
profits
Shareholders
satisfaction
More investment

6. 6
Marketing concepts
1. Focusing on customer wants and
needs to distinguish products from
competitors’ offerings
2. Integrating all the organization’s
activities to satisfy these wants
3. Achieving the organization’s long-term
goals by satisfying customer wants and
needs legally and responsibly
Achieving a Marketing Orientation
Obtain information about
customers , competitors
and markets
Examine the information
from a total business
prospective
Determine how to deliver
superior customer value
Implement actions to
provide value to
customers
Customer Value
The relationship between benefits
and the sacrifice necessary to
obtain those benefits.

7. 7
Marketing Role in The Company
(a) Marketing as
an equal function
HR and
Operatio
nal
FinanceNetwork
Marketing
(b) Marketing as a
more important
function
Marketing
Network Finance
HR
(d) The customer as
the controlling
function
Custome
r
(e) The customer as
the controlling
function and
marketing as the
integrative function
Customer
(c) Marketing as
the major function
Marketing

8. 8
Inactive or
ex-customers
PartnersAdvocatesClients
Repeat
customers
First-time
customers
Suspects
Prospects
Disqualified
prospects
Customer lifetime development and stage

9. 9
Determinante of Customer Added Value
Product
value
Services
value
Personne
l value
Image
value
Time
cost
Psychic
cost
Energy
cost
Monetary
price
Total
customer
value
Total
customer
cost
Customer
delivered
value

10. 10
Profitable
Customer
Relationships
Product
Place Price
Promotion
Competitors
Marketing
Intermediaries
PublicsSuppliers
Demographic-
Economic
Environment
Technological-
Natural
Environment
Political-
Legal
Environment
Social-
Cultural
Environment
Segmentation
Target Marketing
Positioning
Leader, challengers,
followers, nichers
The marketing process

11. Analysys Mason’s structured approach to developing an entry
strategy begins with a comprehensive analysis of the market,
based on market data or tailored research
 Our approach to developing a market-entry strategy follows a proven
and structured process, based on extensive industry experience and
in-depth understanding of all aspects that feed into a commercial
launch
 A comprehensive analysis, using market data and tailored market
research, allows us to assess all areas affecting the operator’s
strategic direction:
– market dynamics: detailed consumer and business market
segmentation and analysis of market drivers will be undertaken
to identify the most valuable target segments and underlying
reasons for market growth. Specific target areas are evaluated
to provide key inputs: retail structures, financial transactions
systems and Internet usage provide input to sales and
distribution planning
– competitive landscape: extensive competitive profiling in
areas such as positioning, brand, target segments, value
proposition, market offer, pricing, customer care, sales &
distribution, coverage, network & support systems enable
assessment of competitors’ strengths and weaknesses
– macro-economic outlook: analysis of relevant
macroeconomic data determine market and segment growth
– legislation and regulatory framework: description of limitations
or possibilities within the current regulatory environment that
affect market and segment growth
– internal assets/technology: analysis of all internal assets
including technology, brand, partnerships will be done to clarify
which sustainable competitive advantages the company holds
 An internal SWOT highlight areas of valid advantages and
disadvantages, providing input to market entry positioning and value
proposition
 Identification of strategic risk areas at an early stage enables
preparation of mitigating actions prior to market entry
 Conclusions from the market analysis together with internal SWOT and
identified strategic risk areas form the basis for describing the market
opportunity
Market
dynamics
Competitive
landscape
Macro-
economic
outlook
Regulatory
environmen
t
Internal
assets /
Technology
Internal SWOT Identified strategic risk areas
Summary and conclusions
Market opportunity description
Market entry strategy
Strategic directions
Pricing
Brand and
communication
Sales and distribution
Products and services
Customer service
Launch phasing
Market analysis
Tactical launch plan Contingency plan
Vision and Mission
Objectives
Overall Strategy
Positioning
Value proposition
Brand
Target segments
Internal and external
factors
Products & services
Pricing
Brand and
communication
Sales & distribution
channels
Customer service

12. Analysys Mason’s overall market entry strategy statement and
market position clearly demonstrates which main directions are
necessary to reach market objectives
 A description of the company’s vision and mission statements as well as
financial objectives form the starting point for the market entry strategy as
they set the framework in which a new entrant will function
 Short-term objectives, sales targets, market share and brand awareness,
will be set against the market opportunity and supplied as input to the
business planning team
 Analysys Mason will develop an overall market entry strategy
statement, clearly demonstrating which main directions are necessary to
reach stated objectives
 The positioning statement visibly describes the company’s strategy in
relation to competition and the value proposition captures the company’s
differentiating advantages and their benefits to potential customers
 The brand strategy explains which values are important to communicate
in order to enhance the company’s relationship with its customers
 Targeted customer segments that need be addressed in order to deliver
desired objectives will be specified and prioritised
 Strategic directions in all functional areas; products & services, pricing,
brand & communication, sales & distribution and customer service further
detail the overall entry strategy. Finally, the launch phasing section
explores the various viable market entry options, their pro’s, con’s and
pre-conditions
Market
dynamics
Competitive
landscape
Macro-
economic
outlook
Regulatory
environmen
t
Internal
assets /
Technology
Internal SWOT Identified strategic risk areas
Summary and conclusions
Market opportunity description
Market analysis
Market position
Business
Company
A
Company
B
Company
C
Price
Consumer
Market position
Business
Company
A
Company
B
Company
C
Price
Consumer
QualityQuality The
imagePrice NW/QoS
The
image
Service
portfolio
Customer
service
Positioning values
The
imageBroad Leader
The
imagePremium Leader
The
imageNarrow Basic
The
imageLeader Adequate
The
imageMedium Basic
The
imageModerate Adequate
Company B
Company C
Company A
Price NW/QoS Service
portfolio
Customer
service
Positioning values
Broad LeaderPremium Leader
Narrow BasicLeader Adequate
Medium BasicModerate Adequate
Company B
Company C
Company A
Market entry strategy
Strategic directions
Pricing
Brand and
communication
Sales and distribution
Products and services
Customer service
Launch phasing
Tactical launch plan Contingency plan
Vision and Mission
Objectives
Overall Strategy
Positioning
Value proposition
Brand
Target segments
Internal and external
factors
Products & services
Pricing
Brand and
communication
Sales & distribution
channels
Customer service

13. Detailed tactical launch plans enable efficient and controlled
implementation, leading to rapid market introduction
 Strategic directions are further detailed into a tactical launch plan,
covering all functional areas. This provides the launch team and
vendors with necessary specifications for implementation and
ensures that all launch activities support the overall market entry
strategy
 A product & service roadmap will be developed by matching
technical capabilities and benefits with customer needs. The
roadmap includes detailed set of individual services or product
packages at and post-launch
 Pricing launch packages and separate services includes
development of complex price modelling and deployment of conjoint
research to assist in the choice of, from customer perspective, the
most valuable pricing option
 Brand and communication plan for market entry includes
development of brand wheel (attributes, benefits, values) and full
launch campaign planning
 The development of a sales and distribution channel plan
involves creation of a tailor made sales and commission model,
detailing of the company’s sales and distribution channel structure
and analysis and recommendation on commission structure and
levels
 The customer service plan includes high level customer service
processes and customer centre dimensioning
 Clear contingency planning enables the company to pre-empt the
occurrence of situations that affect the planned activities and
prepare plans to remedy those, resulting in shortened reaction time.
Both internal and external factors will be analysed
– Internal – e.g. technical and organisational issues
– External – e.g. competitive market activities and regulatory
actions
Market
dynamics
Competitive
landscape
Macro-
economic
outlook
Regulatory
environmen
t
Internal
assets /
Technology
Internal SWOT Identified strategic risk areas
Summary and conclusions
Market opportunity description
Market analysis
Market entry strategy
Strategic directions
Pricing
Brand and
communication
Sales and distribution
Products and services
Customer service
Launch phasing
Tactical launch plan Contingency plan
Vision and Mission
Objectives
Overall Strategy
Positioning
Value proposition
Brand
Target segments
Internal and external
factors
Products & services
Pricing
Brand and
communication
Sales & distribution
channels
Customer service

14. 14
14
Modern definition
Delivering
Value
Communicating
Value
Creating
Value
Customer value
and beneficial
relationships

15. 15
Marketing is the process of
① Defining markets
② Quantifying the needs of the
customer groups within these
markers
③ Developing Value proposition
to meet these needs
④ Playing an appropriate role in
delivering these value
propositions ( communication)
⑤ Monitoring Value delivered
⑥ For this process to be effective
organization need to be
consumer or customer driven

16. 16
Define markets and
segments
Understand Value required
By the customers
Understand competitor
value positioning
Evaluate market segments
attractiveness
1. Corporate
Mission and
Objectives
2. External Data
3. Internal Data
Define Value proposition
Choose Market
Segments
Define
objectives
Value received
Defined price- Value
proposition
1. Low costs
2. Convinces
3. Communication
4. Customer wants &
needs
 Products and
service benefits
Define Market strategy
How value to be delivered
and communicated
Price
Place – Distribution
Promotion – Marketing
communication
Products and service:
Features and customer
service
Estimated result /
Budget – value
received
Analysis of
corporate
objectives Create the Value proposition

17. 17
Deliver Value

18. 18
Define marketing strategy for promotion
Value required by
customers
Latest VS
expected
Value delivered
VS proposition
Value received
VS objectives
How value delivered . Communicated VS
marketing strategy
Products and services Vs Plan and roadmap
[promotion VS Plan MIC
Distribution VS Plan
Pricing Vs Plan
Monitor Value

19. 19
Customer: one who purchases or receives a product or service from a business or merchant, or plans to
Value for Customers
Customerperceivedvalue
Functional
benefits
Brand benefits
Other benefits
Customer
perceived
value
Purchase
price
Other costs
Benefits Costs
Negative
Dissatisfied
Defect
Neutral
Satisfied
switchable
Level of
satisfaction
Emotional
experience
Delighted
Loyal
Positive
Perceived value What will this
product deliver for
me?
Perceived Benefits For the money I’m
paying, what am I
getting
Perceived Costs It’s worth paying
certain amount for
what I am getting

20. 20
Revenue streaming
Marketing
Commercial
Subscribers
Usage
Market share
Brand Health
Economic
Revenue
Revenue by
Products
Financial
Costs of
Sales
Gross Margin
OPEX
EBITA
Revenue
streaming
Subscribers Usage
Revenue
Costs
EBITDA

21. 21
RGS as Core Focus drivers – Subscribers Indicators
Duration ( one year)
Openin
g RGS
Gross Ad
Churn Net
Add
Closing
RGS
Open
period
Close
period
From BI we need to identify:
1. Total No of sub
2. Total No of RGS
3. Total No of Gross ads
4. Total No of Churn ( 90 Days)
5. Total No of Net adds
+ Calculate Closing RGS
Gross connection Market penetration
Net Adds Growth
RGS Company Size and
market share
Voluntary and involuntary churn:
Switch to competitor
bill not paid
halt of the usage of the secondary sim
card
•Loss of sim card
•Tourists.

22. 22
Market share Indicators
Market share Subscribers
Value share Revenue
Share of Talk Usage
Relative market
share
Against Main competitor
Marginal Market
share
Net Additions
Share in shops No of outlets
Share of Wallet Customer budget
Share of Voice Media presence
Brand health score Ratio Brand share / market share
Customer satisfaction
score
Overall rating of company value
proposition from customer
SOUL Share of user loyalty
Global brand index Degree of which brand plays a role in
sales
Brand equity Value (goodwill) of the brand in the
market
Top of mind People quoting the brand in top
position
Total spontaneous People quoting spontaneously the
brand
Aided awareness People knowing the brand (with or
without recall)
Branded image strength People making association brand-
statement
Brand image character People making the association
positively
Brand preference People who like or recommend
Brand affinity People with strong relationship
Assess the brand position of the company.Give the quantitative position of the
company in the market place.

23. 23
New and traditional
Marketing and commercial indicators
Traditional Matrix
Minutes of use per subscribers
MOU
Total duration of calls/user
Number of calls Frequency of use
Call length/duration Average duration of call per user
Data usage No of SMS , volume of data per user
Modern Matrix
Sphere of influence SOI Distinguish calls
Sphere of reception SOR People calling
Return call index RCI Ratio SOI/SOR
Call distance Time distance between two calls
(average, min and max)
Days of call Total number of days of calls
MOU/User = SOI x Number of calls/p. x Call length
Ex: MOU = 80 x 1.5 x 40=4,800 sec Call box?
Ex 2: MOU = 12 x 5 x 80 =4,800 sec Businessman?
Ex3: MOU = 4 x 20 x 60 = 4,800 sec .F & F

24. 24
Economic Indicators
The goal is to track the capacity of the company to generate money
from its subscribers.
Gross revenue Distribution
channel
Loadings Recharge by Customers
Service revenue (usage Earned revenue for the
company
SDP balance Airtime within
customer’s phones
1. Monitoring should concern various items: prepaid/postpaid, interconnect, roaming,
airtime, voice/data, split by region, by destination (onnet/offnet, international), by
tariff plan, by segment of customers, etc.
2. At the end of the day, service revenue is the key indicator. But the other items (gross
revenue, loadings, SDP) make it possible to analyze and to foresee service revenue.
Revenue per unit
ARPU Average Revenue per user
AMPU Average margin per user
Marginal ARPU/ASPU New subscribers or incremental
revenue
CLV (Customer Lifetime
Value)
Total net revenue over time
Marginal ASPU tracking and analysis enables:
1. To determine if new subscribers generate
revenue that permits maintenance of a given
level of profit;
2. To be more accurate concerning revenue
modeling.

25. 25
Financial Indicators
Operational costs
Cost of sales CoS Focus on:
1. Recharge vouchers
2. Commissions and distribution
3. Interconnect
4. Roaming cost
5. Cost of handsets
6. Sim card and Sim packs
OPEX
Focus on marketing (advertising, promotions
and public relations)
Financial indicators measuring marketing and
commercial effectiveness
Revenue ratios
(%)
Qualitative ratios
(currency/unit)
Marketing OPEX / revenue
Commissions and distribution/revenue
(out-bound) revenue
Marketing OPEX/RGS revenue
Marketing OPEX/gross connections revenue
Marketing OPEX/net additions revenue
Acquisitions cost/gross connections revenue
Marketing Quality of products/services
Suitability of products/services with target
Timing of new product launch
Quality of ATL/advertising (message, media
Quality of BTL/trade marketing support
Share of voice and targeting of marketing
support
Pricing features (level, flexibility)
Commercial Stock availability with distribution channels
Outlets management (share of outlets and
coverage quality)
Support for sales team (number and quality of
the visit to dealers and direct customers)
Customer
demand
New consumption scheme from
customers (consumption vs.
savings, new consumption
priorities)
Consumers confidence index

26. 26
Commercial Stock availability with distribution channels
Outlets management (share of outlets and coverage quality)
Support for sales team (number and quality of the visit to
dealers and direct customers)
Other
Support
Network coverage
Network quality (loadings,
communication, etc)
Customer service support
(service centre, call centre,
inquiries, etc:
Supply chain support (stock
availability)
Finance support (payment of
commissions)
Customer
demand
New consumption scheme
from customers
(consumption vs. savings,
new consumption priorities)
Consumers confidence index

27. 27
Business consideration
1
A boom of RGS leads to a strong increase of
revenue
1. New subscribers are generally low end users.
2. Important to observe the proportion of multisim users.
3. Important to measure churn (balance)
4. New subscribers are generally low end users.
5. Important to observe the proportion of multisim users.
6. Important to measure churn (balance)
Because new subscribers are supposed
to bring in revenue…
A boom of RGS leads to a drop of
Because new subscribers are in the
bottom of the pyramid (low end users
• Probability of high churn from competitor.
• Impact of VAS development and its impact on usage.
• Useful to consider impact of a positive economic
conjuncture.
A boom of gross connections will
increase market share
2
3
Because new subscribers will strongly
increase our RGS
1. Important to verify that we grow faster than the whole
market.
2. Important to analyze the nature of new subscribers
(volatility issue).
3. Important to analyze structure of this boom (reactivations,
RGS definition).
4 Postpaid customers are highly
profitable
Because they generally have highest
ARPU than prepaid customers
1. Important to analyze the margin (effective tariff and
costing)
2. Important to analyze churn impact (debts).
3. Important to analyze the margin (effective tariff and
costing)
4. Important to analyze churn impact (debts).

28. 28
• Telecommunication Platform & revenue streaming
Prepaid
Postpaid
CorporateIndividuals
1. No of corporate
2. Corporate segmentation
3. Potentiality of the
corporate
4. No of Lines
5. Usage ( Outgoing .
Incoming , On-net and
off-net , International
and demotic
6. Data usage (Volume GB
7. Interconnection costs
8. Mobility & coverage
9. Roaming
10. RGS
11. Payment and methods
12. Geographical Zone
13. Potential of Smart
Phone
14. Packaging & business
solutions
1. Classification and
segmentation - ARPU
2. Telecommunication needs
3. Packaging
4. Usage Data and Voice
5. Potential of ARPU –
immigration
6. RGS and Off-net –
Interconnection and
revenue
7. Outgoing / Incoming
8. International calls
9. Primary and secondary
SIM
10. Type of Handsets
11. VAS revenue and usage
12. Packaging and customized
usage

29. 29
Telecom Platform
Partners
Own Sales
Points
POS
Retailers
E- distribution
Role of distribution system within Telecom

30. 30
Developing a Distribution Strategy & channel Management :
Distribution Strategy Development
Key Decisions:
• Channel Length
• Channel Breadth
– Exclusive, selective or intensive
– Multiple / single channel
– Intermediary Selection
– Choice of promotional strategy
Market
characteristi
cs
Cost
Legal
restrictions
Existing
intermediaries
Company
resources and
reputation
Product
features
Key Factors to Consider:
The major output from this training is enable the distribution and sales establish Sales and
distribution strategy elements and assessment so as to develop a sustainable competitive
advantage , control when elements of the five force model ( bragging power of distributors )
– actualization marketing strategy and objectives of growth , contributed in the overall
corporate strategy and operational plan to achieve business objectives
‘Strategic’
Decisions
‘Tactical’
Decisions
Channel
economics
Customer
preferences
Incentives

31. 31
Customer experience
Buying
Activat
ing
Usage Paying
Contact
ing
Gettin
g to
know
Contac
ting
Customer
expectatio
ns
Functional
area
1. Brand
awarenes
s
2. Offer
availabilit
y (what &
where)
1. Marketing
2. Sales
3. Customer
service
1. Offer
availability
2. capillarity
3. Value for
money
1. Marketing
2. Logistics
3. Sales
4. Customer
Service
1. Speed
2. Connivance
3. Getting
start
1. Marketing
2. Sales
3. Network
4. IT
5. Customer
Service
6. Portal
Customer
experience
elements
1. Usability
2. Coverage
3. Reliability
4. Quality
5. Roaming
6. Service
VAS
1. Network
2. IT
3. Customer
Service
1. Accuracy
2. Control
3. Choice
4. Convenien
ce
1. Sales
2. IT
3. Customer
service
1. Responsiv
eness
Friendline
ss
2. Consistenc
y
3. Helpfulnes
s
4. Resourcef
ul
1. Customer
service
2. IT
3. Portal
1. Flexibility
2. Loyalty
1. Marketi
ng
( Save
team)
1. Sales
2. Custom
er
service
3. IT

32. 32
RevenueFINANCIAL
Users ARPU
SALES
Gross Adds PoS Churn
OPERATIONA
L
Per region
G.A. per PoS
Per region
Per
activation
PoS
Per value
tier
VALUE
MANAGEMENT
#
Recharge
$
Recharge
Per price
plan
Per price
plan
Per
promotion
Per
promotion
Per PoS Per PoS
%
Penetration
% Pop.
covered
Duration
%
Consume
d
Sales and distribution KPIs
Evaluated Sales and distribution system and models Focus on Simulation case and developed Sales and
distribution strategy all through the training – developing &I implementing Actual Business case
1. Total Sales revenue
2. Revenue splits &
contribution %
3. Revenue share %
4. Sales revenue by
channels
5. Channel activation
6. Scratch card
availability , Total
and By channels
7. Network utilizations
by BTs , Cities &
region
8. CoS by channel
and channel
member
9. Sales of scratch
card by face value
and contribution on
total Sales
10. Other KPIs

33. 33
METHODOLOGY > REVENUE ORIENTED KPIS
the commercial success of Zain , i.e., how much of the total communication
budget are we capturing.
Revenue
RationaleKPIs
• The most basic KPI is the number of subscribers/market share,
unfortunately it is also the easiest to be distorted.
Users
ARPU
MoU
ARPM
Average
Recharge
Number of
Recharges
• For the higher-value segments ARPU can be the only valuable
metric as they are likely to migrate towards “all you can eat” plans
• Increasing the usage is relevant for all groups, even when it does
not translate into additional revenues as it increases perceived value
• The average revenue per minute will be more important for low-
usage subscribers that are at their maximum level of usage
• Increasing the amount recharged through promotions and offers can
help medium-value subscribers into higher spending
• While more frequent recharges is likely the way to go for low-value
users that find affordability barriers

34. 34
Marketing KPIs – the bottom line
RevenueFINANCIAL
Users ARPU
MARKETING
Active Base Gross Adds Churn
OPERATIONAL
Per price
plan
Per value
Per price
plan
Per value
Per price
plan
Per value
Per
promotion
VALUE
MANAGEMEN
T
ARPU MoU
Per price
plan
Per price
plan
Per value Per value
In / Out In / Out
Market
share
Per
destinatio
n
Per
promotion
Calls
Per price
plan
Per value
Call
length

35. 35
Segmentation, Targeting, Positioning
1. Identify
segmentation
variables and
segment the market
2. Develop profiles of
resulting segments
Market
Segmentation
Market
Targeting
3. Evaluate the
attractiveness
of each
segment
4. Select the target
segment(s)
Market
Positioning
5. Identify possible
positioning concepts
for each target
segment
6. Select, develop, and
communicate the
chosen positioning
concept

36. 36
Five Patterns of Target Market Selection
M=Market)
(P=Product /
Full
coverage
M1 M1M1
P1
P2
P3
Product
specialization
M1 M1M1
P1
P2
P3
Single-segment
concentration
M1 M1M1
P1
P2
P3
Market
specialization
M1 M1M1
P1
P2
P3
Selective
specialization
M1 M1M1
P1
P2
P3

37. 37
Market Segmentation
1. Young urban consumers are the highest users of
mobile services
2. Prepaid and Postpaid 3G Smartphone customers are
a high-value segment
3. 36 to 45-year-olds have high potential
4. Behavioral and attitudinal factors significantly impact
service usage

38. 38
There are multiple approaches to customer segmentation…
Demographic
Behavioral
Usage profile (i.e. domain
specific)
• Based on customer personal, demographic, and socio-
economic circumstances: age, income level, socio-economic
group,…
– Pro’s: simplicity
– Con’s: not directly linked to usage of service, hard to
get for prepaid customers
• Built upon customers’ lifestyle
– Pro’s: Identify customers’ key interests
– Con’s: Impossible to apply for a prepaid customer
base. Depends on what people “claim” to be and to do
• Supported by current usage patterns, it identifies implicit
needs behind usage drive
– Pro’s: Effective. It is based on actual usage and not on
stated intentions
– Con’s: complex data processing, not practical for many
operators

39. 39
A usage based segmentation allows us to build on the implicit to design
an offer that best matches the customers’ needs
• Ability to talk long time with friends
• Low total spending
• Willing to sacrifice convenience for
cheaper tariffs
• On-net bundles for voice/SMS
• Incoming traffic bonus
• Regressive tariffs (per call, per
month,…)
Group A
Needs Offer
Group C
• Needs to make calls at any time
and more likely to any destination
• Low cost per call
• Makes very short calls
• Per second billing
• Simple tariffs
Group B • Multiple sim-user, keen on
arbitration
• Cheap off-net calls

40. 40
• The segmentation identifies groups,
or clusters, of customers with a
similar usage profile and uses the
values for an “average” customer,
i.e. one in the centre of the cluster
as representative for the whole
group.
• Each of these groups will be
characterized by different levels of
usage in the different dimensions
used in this exercise.
• Finally, in order to prepare an Action
Plan we have also classified the
seven groups in high-, medium-, and
low-ARPU.
The initial results from the segmentation exercise show that, using the
variables described in the previous section, we can identify several
profiles.
High ARPU
Medium
ARPU
Low ARPU
• Heavy Users
• International users
• Receivers
• Heavy on-net users
• On-net
• Sudani-callers
• Zain-callers

41. 41
Heavy users segment shows higher ARPU as long as larger
revenue contribution
Heavy users segment is the main contributor to
outgoing revenues...
...driven by high ARPUs
• Heavy users segment shows the highest ARPU Out levels.
Therefore these are high value customers to Zain and first priority
should be ensuring their loyalty
• Great appetite for communications characterize these customers,
which will likely show sensitivity not only to price but also to other
market levers such as customer service, simplicity….E.g. on
Marketing actions to test on this segment:
– Community action aimed at locking the customer within the
Zain network
– Further developing usage by elasticity creation, e.g.,
simplicity oriented tariffs
– V.A.S. upselling
Heavy users Total
group size 28,877 469,598
# outgoing calls 143 35
# outgoing mins 472 102
call out length 104 82
arpu out (USD) 46.0 9.5
revenue per call (USD) 0.174 0.139
% outgoing onnet 44% 43%
% out Sudani 18% 20%
% out Zain 36% 34%
% out International 0.4% 0.4%
% out on peak 77% 79%
# SMS out 19 10
% onnet SMS 34% 32%
% international SMS 8% 5%
# incoming calls 107 38
# incoming minutes 274 130
% incoming onnet 39% 42%
international users segment show high ARPU..
Heavy onnet users segment is characterize by high
ARPU...
On-net users....
Zain callers segment strongly contributes to total
revenues...

42. 42
The different segments can be grouped in terms of (potential) size and
customer value to Zain in order to time the actions.
Preliminary results
Potential value for Zain
PotentialSize
Value
Growth
Defensive
Area
Base
Growth
Value
Growth
Preliminary proposed approach
• The customers in those segments
have the highest level of spending
and they are, based on focus-
group results, probably under-
represented in our base
Defensive
Area
• These customers have been
identified in our base as having
medium outgoing traffic levels
either split with another operator
or purely on-net
Base
Growth
• These are low-value customers,
the most numerous, and therefore
critical to reach our customers
targets
Heavy
users
Heavy
on-net
users
Internatio
nal users
Receiver
users
Zain
callers
Sudani
callers
On-net
users

43. 43
Action Plan direction
Possible actions to be explored in following project stages
Target now…
• Value Growth and Defensive
area: Defensive actions to
prevent revenue erosion,
especially for the more
numerous heavy-users
segment
• Base Growth: Focus on
acquisition campaigns
Target soon…
• Value Growth: Focus on long-
term retention strategies
(hybrid/post-paid plans)
• Defensive area: Below the net
campaigns to stimulate
consumption
• Base Growth: Churn
management actions. Offers
and products to consolidate
traffic, and as a side effect deter
churn
Target later…
• Value Growth: ARPU stimulation
campaigns, new products and
services (data content related,
international best-rates…)
• Defensive area: Develop a
Prepaid-premium proposition
(Structural incentives for on-net
and incoming traffic, better
customer care)
• Base Growth: Campaigns to
migrate them towards heavy on -
net
Next 3 months 3 – 6 months 6 - 12 months
time

44. 44
Analysis of internal Company Resources- Of customers & your own
Value Chain Analysis
Company Infrastructure (Leadership, Financial Management, etc.)
Human Resources (Staff planning, -acquiring, -development, etc.)
Technology development (Research & Development, IT-Systems, etc.)
Procurement (Raw Materials, Equipment, Facilities, etc.)
Inbound
Logis,cs
 Incoming
goods
 Storage
 etc.
Produc,on
 Produc,on
 Packaging
 etc.
Marke,ng
&
Sales
 Prices
 Distribu,on
 Adver,sing
 Process
 etc.
Outbound
Logis,cs
 Warehouse
management
Delivery
 etc.
Service
 Installa,on/
Configura,on
 Maintenance
 Supplies
 AEer
sales
 etc.
SecondaryActivitiesPrimarilyActivities

45. 45
Life Cycle Analysis− Phases
Characterization of four ideal-typical Phases
Profit
Revenue
Increase
familiarity
expand
market
share
Focus
on
marke,ng
product
improvement
and
product
diversifica,on
Defense
of
market
share
and
product
modifica,ons
necessary
Cost
control
Ensure
produc,vity
Growth
Phase
Introduc,on
Phase
Decline
Phase
Maturity
Phase
 Products
largely
unfamiliar
 Low
revenue
and
high
ini,al
costs/
development
costs
 Nega,ve
profits
in
sales
and
marke,ng
 Growing
awareness
of
the
product
 Dispropor,onal
increase
in
sales
 Posi,ve
Profits
 Increased
compe,,on
and
compe,,ve
pressure
 Maximum
sales
 Declining
Profits
 satura,on
of
the
market
 Maximum
number
of
compe,tors
 Degenera,on
phase
with
steadily
falling
profits
 Low
profits
 Changed
customer
needs
 Low
demands
 Exit
market

46. 46
Customer Satisfaction Analysis
Determine
performance
criteria
from
perspec,ve
of
respondents
and
business
ra,os
1
Evaluate
performance
criteria
and
gather
business
ra,os
2
Eliminate
dissa,sfac,on
3
Increase
sa,sfac,on
4

47. 47
Ansoff Matrix: What is it?
Market
Penetration
Product
Development
Market
Development
Diversification
PRESENT
PRODUCTS
NEW
PRODUCTS
PRESENT
MARKETS
NEW
MARKETS
1 2
3 4
• A tool that helps to evaluate the possible strategic
growth directions for a business
• In summary, there are four basic choices to drive
growth:
1. Grow existing products in existing markets
2. Introduce new products into existing markets
3. Enter new markets with existing products
4. Develop new products and introduce these into
new markets
7
Descrip,on
1
?
High
Annual real
rate of
Market
Growth (%)
Low
Relative
market
share (%)
LowHigh
• A framework that:
– Enables one to judge the overall
‘health’ of a portfolio of businesses; or
– Facilitates the decision making
process for the allocation of resources
among business units (or products)

48. 48
high
Relative Market Share
Question Marks
Poor Dogs
Stars
Cash Cows
low
high low
MarketGrowthRate
BCG Matrix
Product
Life
Cycle
DIVEST
INVEST
SLIM
SKIM
Size of bubble
represents
revenue
Link product lifecycle with BCG

49. 49
Existing
customer data
base Cross-
selling and up-
selling
Opportunities
90%
Change Management Iceberg
New acquire customers
10%

50. 50
The US Market Opportunity"
2700 businesses, <2500 employees"
$4.8T in revenue, 31M employees"
25K businesses, >2500 & < 250
employees"
$2.0T in revenue, 15M employees"
4.2M businesses, < 250 employees"
$4.7T in revenue, 41M employees"
Mid Market"
SMB"
Enterprises"

51. 51
$1 billion English
travel guides sold
annually "
$210 million 20-35 year
old travelers"
$123 billion tourism
industry inside the US"
(Initial test market)"
Total
available
market"
Served
market"
Target
market"
Addressable, Served & Target Market"
A city"

52. 52
The Technology Adoption Curve"
0" 1-2" 3-5" 6-10" 10-15" 15-20"
Innovators" Early
majority"
Late
majority"
Laggards"
Note: On average, a company will need at least 6-10 years in a market to establish
market category dominance"
Years"
Early
adopters"
2.3%" 16%"34%" 34%"13.6%"

53. 53
The total value proposition is the sum of
the offerings and experiences
delivered to your customers, during all
their interactions with your organisation
All
products,
services
and
solu,ons
and
their
func,onality
How
your
customers
experience
your
products,
services
and
your
company
Your
customer’s
experience
through
all
touch
points
with
your
company
such
as
marke,ng,
sales,
delivery,
customer
service,
aEer
sales
service,
invoicing,
legal/contrac,ng
Definition of a total value proposition
The issue for many companies is
they don't have a total value
proposition

54. 54
Are your sales people creating sales propositions in a vacuum?
Without sales proposition being joined
up to and driven from the company-
wide, total value proposition, it will be
off-target and lose its power and impact
This will cost you money in many ways:
1. Ineffective marketing campaigns
2. Chasing the wrong sales opportunities
3. Attracting bad opportunities
4. Wasting time through reinventing
everything each time lack of focus =
Waste of money

55. 55
Create
your
company
value
proposi,on
first
and
refine
to
create
tailored
sales
proposi,ons
from
it
Value
proposi,on
to
sales
proposi,ons

56. 56
It’s not a one-way street.
Feedback from sales teams on
customers and markets is vital
to keep the total value
proposition relevant and well
positioned.
Feedback is vital
Value
Propositi
on
Sales
Propositi
on
Value =
Benefits: all the good points that customers perceive –
the positive functionality of the product, its attributes, the behaviours of
your people interacting with customers and the values and greater
purpose that your organisation stands for and the contribution it makes
Minus
Costs: all the bad points that customers perceive –
the negatives of the product functionality, attributes, behaviours and weak
or non-existent values and greater purpose, as well as the cost and risk to
your customer
Let’s look at how people understand value
Value = Benefits – Costs2

57. 57
Many companies create their value
proposition in their own image but your
value proposition isn’t all about you.
You must bring your customer into the
creation of your value proposition.
Value is not all about you If you don’t bring your customers into
value proposition creation, you’re just
making a guess about what your
customers truly value. This is about
much more than just asking them what
they want.

58. 58
General Guidelines for completing this Account Guidance section
OBJECTIVES
 Provide an overview of the account
 Identify financial targets by discipline
 Articulate the current state
 Identify the makeup of the account team
 Identify all the client key players– those who will help and those who may harm the relationship
 Understand the current pipeline status
 Identify the BD investment plan
 Identify how the NA Country Board can enable you to drive the cross discipline growth ambitions of your account
SUGGESTED DATA SOURCES
 Account Executive
 Client public materials – annual report, SEC filings (10-
K, 10-Q), strategy documentation, press releases
 Analyst reports
 Account team (relationship map)
 Current pipeline
 Situation appraisal document
 Business development investment plan
 Finance
KEY QUESTIONS
 What are the account ambitions for 20XX?
 What does the account team structure look like?
 Who are the key decision makers in the client and what
is our relationship(s) with them?
 What business development investment will be required
to achieve the specified ambitions and expand our
footprint within this account?

59. 59
Account Overview
TOP 3 CURRENT OPPORTUNITIES
Opportunity name TCV ($M) Opportunity description Discipline Sign state Sales stage Probability
BASIC ACCOUNT MANAGEMENT INFORMATION BASIC CLIENT INFORMATION
Account name
Revenue and profit
20XX
Account Executive # of Employees
Sales Executive Industry trends, key
issues and
opportunities
 <…>
 <…>
 <…>
Our Strategic
Strengths
 <…>
 <…>
Our One Critical
Vulnerability
 <…>
Our Performance
($M)
Last Year
Budget
(This Year)
YTD
Forecast
This Year
Bookings
Revenue
CM ($M)
CM%

60. 60
Situation Appraisal
Give a brief overview of the current account situation
Statement of
intent
 Our overall account goal is to sell “X $$” until “200X”;
our strategy to achieve this goal is …
 By concentrating on “BU XYZ”
 By offering “solution”
 Positioning our company as “how” .
 Establishing relationships to “XYZ”
Our current
positioning and
market share at
client
 The client perceives us as a “XYZ” company; this derives from our “project history”, “sales history”,
“relationships / network”, etc.
 We have X% of the <A> budget, <B> budget, <C> budget
 Our current delivery track record is…
Relationship
status
 We have good/reasonable/weak contacts to the executive/management/operational level
 We are addressing currently “Buying Center X” by doing …
 We need to build up / deepen contacts in “Buying Center Y and Z” because … this will be done by …
Our top 3
competitors in
the account and
their positioning
 Comp 1 is perceived as “XYZ”, resulting from
 Comp 2 is perceived as “XYZ”, resulting from
 Comp 3 is perceived as “XYZ”, resulting from

61. 61
Account Team
Account Name
Account Executive
Account Executive Sponsor
Core team (country account
managers, discipline
representatives etc.)
Name Role Discipline
Extended team (delivery leads,
subject matter experts, alliance
etc.)
Name Role Discipline
Comments on current account team capabilities and needs
• <…>
• <…>

62. 62
Client Name Job Title *Role Our Relationship Owner
[Identify all the key players in the account – those who will help you and the other members of your team and those who may harm the relationship. Then
identify which member of the account team owns that particular relationship]
Relationship Map
*Role:
Sponsors – Promoting you in the account
Strategic Coaches – Providing guidance and direction
Anti-Sponsors – Working against your position
Other key players – Playing a part in the relationship

63. 63
Identified
Contacted
Qualified
Developed
Closed
Completed
Opportunity/Initiative Date Won / Lost / N/A
1. Implementation of XXXX for the office of the CMO
(example)
2.
3.
August 17, 20XX N/A
1.
2.
3.
1.
2.
3.
1.
2.
3.
1.
2.
3.
1.
2.
3.
Stage7Stage6Stage5Stage4Stage3Stage2
Current Pipeline

64. 64
Business Development Investment Plan (Optional)
Program Audience Owner Timeframe Cost Expected ROI
Annual Budget ($M): $
Forecasted Spend ($M): $

65. 65
General Guidelines for completing this Competitive Positioning section
OBJECTIVES
 Link key client issues to your company’s capabilities
 Identify key opportunities
 Identify how to use our Alliance Partnerships to maximize our position
 Understand how our competitors are supporting the client
SUGGESTED DATA SOURCES
 Capability unit Subject Matter Experts
 Account team
 Delivery team
 Client public materials – annual report, SEC filings (10-K,
10-Q), strategy documentation, press releases
 Analyst reports
 Account SWOT
 Account Action Plan
 Marketing Plan
 Competitive footprint
KEY QUESTIONS
 What does the account need to do to deliver their strategy/
address their burning issues?
 What capabilities does your company have to support the
account with these projects?
 Do we have any credentials in working in this space?
 How can we best utilize our strategic alliance partnerships?
 What strategy do we use to put us in the best position in
relation to our competitors?

66. 66
Action Name Action Description Owner Timeframe
Account Key Action Plan and Penetration Strategy

67. 67
Provide an overview of the existing of future account-based marketing priorities and strategy
Marketing Plan
Timeframe Themes / Messages Audience Content/Collateral Owner Medium
(print, video, event, etc.)
Future  AAA
 BBB
 CCC
 Content Developer:
 Collateral Producer:

68. 68
Competitor
name
Market position and
trend*
Top 3 client
relationships
Positioning & pillars within
client
Strategy (sales approach,
campaigns, relationship, push
offerings, pricing)
Issues
[CompanyY
]
[Strong but
decreasing]
[CIO, Name
CEO, Name]
[Strong CxO
relationship.
Trusted advisor status]
[Uses historical relationships
and incumbent position to sell]
Competitive Footprint

69. 69
www.businessmodelgeneration.com!
The Business Model Canvas
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How much does each Revenue Stream contribute to
overall revenues?
Through which Channels
do our Customer
Segments want to be
reached?
How are our Channels
integrated?
Which ones work best?
Which ones are most cost-
efficient?
How are we integrating
them with customer
routines?
What type of relationship
does each Customer
Segments expect us to
establish and maintain?
Which ones have we
established?
How are they integrated
with the rest of our
business model?
How costly are they?
For whom are we
creating value?
Who are our most
important
customers?
How do we
differentiate our
Customer
Segments
What value do we
deliver to the
customer?
Which one of our
customer’s
problems are we
helping to solve?
Which customer
needs are we
satisfying?
What Key Activities do
our Value Propositions
require?
Our Distribution
Channels?
Customer Relationships?
Revenue streams?
Who are our Key
Partners?
Who are our key
suppliers?
Which Key Resources
are we acquiring
from partners?
Which Key Activities
do partners
perform?
What Key Resources
do our Value
Propositions require?
Our Distribution
Channels? Customer
Relationships?
Revenue Streams?
What are the most important costs inherent in our
business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
Alexander Osterwalder!

70. 70
1. Customer Segments (CS) – Who you serve?
• Mass market
• Niche market
• Segmented
• Diversified
• Multi-sided platforms
2. Value Propositions (VS) – The
value you provide:
• Newness
• Performance
• Customization
• Getting the job done
• Design
• Brand/ status
• Price
• Cost reduction
3. Channels (CH) – How
the value is delivered to
your customers?
• Own
• Partner
• Direct
• Indirect
Channel Types:
• Sales force
• Web sales
• Own stores
• Partner
• Stores
• Wholesaler

71. 71
4. Revenue Streams (R$) –
Your revenue sources
• Asset sale
• Usage fee
• Subscription fees
• Lending / Renting / Leasing
• Licensing
• Brokerage fees
• Advertising
4. Customer Relationships – The communication
environment with your customers:
• Personal assistance
• Dedicated personal assistance
• Self-service
• Automated services
• Communities
• Co-creation
6. Key Resources (KR) – the items
you need to create your value
proposition
• Physical
• Intellectual
• Human
• Financial

72. 72
7. Key Activities (KA) – the
things you do with those
resources
• Production
• Problem solving
• Platform/ network
Canvas
9 Building Blocks
8. Key Partnerships (KP) – third parties
who also perform key activities in order
to provide the value proposition
• Optimization/ economy of scale
• Reduction of risk & uncertainty
• Acquisition of resources and activities
9. Cost Structure (C$) –
your costs
• Cost-driven
• Value-driven
• Fixed costs
• Variable costs
• Economies of scale
• Economies of scope

73. 73
Business model innovation requires a strong customer value
proposition, viable profit formula, and access to key resources and
processes…
A successful business model has 3 key components:
• Customer Value Proposition. The model helps customers perform a specific job, which
alternative offerings don effectively address.
• Profit Formula. The model generates value for your organization through such factors as
revenue model, cost structure, margins, and inventory turnover.
• Key Resources and Processes. Your organization has the people, technology, products,
equipment, facilities, and brand required to deliver the defined value proposition to the target
customers. It also must have the processes to leverage these resources.
1
2
3
Customer Value
Proposition Profit Formula
Key Resources
and Processes
Successful
Business Model+ + =
1
2 3

74. 74
The blueprint of a business model consists of 4 elements—Customer
Value Proposition, Profit Formula, Key Resources, and Key Processes …
Business Model Elements (1 of 2) FOCUS ON THE
OPPORTUNITY
CONSTRUCT A
BLUEPRINT
COMPARE NEW MODEL
WITH EXISTING
1 2 3
Customer Value
Proposition
1
Profit Formula
2
Key Resources
3
Key Processes
4
The Customer Value proposition and Profit Formula define value for
the customer and the company
The Key Resources and Key Processes describe how that value will
be delivered to both the customer and the company

75. 75
… the Profit Formula along with Key Resources and Processes define
how the Customer Value Proposition can be profitably fulfilled
Business Model Elements (2 of 2) FOCUS ON THE
OPPORTUNITY
CONSTRUCT A
BLUEPRINT
COMPARE NEW MODEL
WITH EXISTING
1 2 3
Customer Value
Proposition
1
Profit Formula
2
Key Resources
3
Key Processes
4
• Target customer
• Job to be done to solve an important problem
or fulfill an important need
• Offering that satisfies the problem or fulfills
the need
• Revenue Model. How much money can be
made
• Cost Structure. How costs are allocated
• Margin model. How much each sale should
net to achieve desired profit levels
• Resource Velocity. How quickly resources
need to be used to support target volumes
• Processes
• Rules and Metrics
• Norms. E.g. opportunity size needed
for investment, approach to customers
and channels
• People
• Technology
• Equipment
• Information
• Channels
• Partnerships, Alliances
• Brand

76. 76
Questions & feedback? Email me – dave@learnppt.com
The diagrams in this pack are to be used by the original buyer only.
learnppt.com
You will find that all business cases have the same core objectives
Objectives – Core Objectives of Business Case
 Quantify major improvement opportunities
 Ensure project resources are allocated to the areas of highest leverage
 Establish the range of benefits to be achieved through implementation activities

Provide the basis for assessing the return on investment and tracking benefits to the
bottom line during the implementation phase
 Develop the rational basis for making change necessary

77. 77
Questions & feedback? Email me – dave@learnppt.com
The diagrams in this pack are to be used by the original buyer only.
learnppt.com
And, although the business case is viewed as the rational element, its
uses are both political and emotional in nature
RATIONAL POLITICAL EMOTIONAL
 Understand the financial drivers of
the business
 Establish the potential scope and
scale of benefits
 Ensure resources are allocated to
areas of highest leverage
 Quantitative estimation of the
results of project implementation
 Assess the ROI and impacts on the
company s financial statements
 Use as baseline for benefits
tracking through implementation
 Gain insight drivers of hot/key
executive issues
 Assess the financial health of the
organization
 Provide quantifiable and objective
backing to projects or other
investments
 Create political risk for project
sponsor if opportunities identified
are not acted upon
 Show that an integrated approach
must be taken
 Gain credibility and develop rapport
with key decision makers and
executives
 Create career wins for yourself.
project sponsor, or other key
stakeholders if identified
opportunities are acted upon
 Create a vision of what he company
could become
Objectives – Rational, Political, and Emotional Elements

78. 78
Questions & feedback? Email me – dave@learnppt.com
The diagrams in this pack are to be used by the original buyer only.
learnppt.com
 Identify major areas of revenue and cost assets and their
key drivers
 Identify true value (i.e. revenue and costs):
– By function/activity
– By process
– By product/client type
 Quantify the financial impact of improvement
opportunities from streams
 Validate business case and gain sign-off
The business case stream identifies areas of opportunity and quantifies the
improvement potential
OBJECTIVES CRITICAL SUCCESS FACTORS
 Understanding of the business case within the project
 Access to key data and knowledge holders within client
 Availability of key resources to validate findings
 Timely input from streams
SCOPE
 Summary analysis of costs and revenues
 Detailed analysis of operating costs
DELIVERABLES
 Detailed breakdown of current costs and revenues
 Quantification of financial impact of early wins
 Benefits case estimate for improvement potential in costs
and revenues:
– Including payback periods
 Input to design of benefits-tracking mechanism
ACTIVITIES
 Conduct focus interview
 Analyze financials
 Build business model
 Build top-down business case
 Analyze benefits from team
 Build bottoms-up benefits case
 Prepare business case for benefits-tracking
Business Case Stream Charter

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Contents
• Overview
- Executive Summary
- Objectives
- Business Case Stream Charter
• Quantitative Analysis Elements
• Business Case Modeling
• Sample Business Case Model (Excel document)
• Final Words
- Dos and Don ts
- Common Pitfalls
- Rules of Thumb

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The structure of a business case is built on a combination of four
separate, yet interlinked, quantitative analysis elements
The extent of each element varies from case to case—but, they are always there.
Bottoms-up
Benefits
Case
Business
Modeling
Top-down
Business
Case
Financial
Analysis
BUSINESS
CASE
ELEMENTS
Enabling Element
Core Deliverables
Quantitative Analysis Elements

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Each of the analytical elements has different objectives and requires
different types analyses
Financial Analysis
Business Modeling
Top-down
Business Case
Bottoms-up
Benefits Case
 What is going on in the company?
– Understand the business
– Create urgency
– Quantify the competition gap
 Financial reporting
 Ratio analysis
 Breakdown ROCE (DuPont analysis)
 Stakeholder value calculations
 Simple sensitivity analysis
 What could potentially happen to the company?
– Understand the future scenarios
– Set the aspiration
– Quantify the risks
– Focus the strategic analysis
 Linked sensitivity analysis
 Valuation modeling
 Scenario modeling
 Optimization analysis
 What are the challenges and associated costs?
– Establish the link between the financial analysis and the
bottoms-up business case
– Fine tune the business drivers
– Understand the economics of the business
– Quantify the preliminary amount of accessible benefit
 P&L and Balance Sheet impact
estimation
 Cash flow NPV modeling
 ROI calculation
 What level of benefits do we commit to achieve?
– Develop fields of opportunities
– Identify the origins of the low performance
– Quantify and validate the identified opportunities
 Opportunity charts
 Opportunity selection, prioritization,
and phasing modeling
OBJECTIVE ANALYSIS
Quantitative Analysis Elements – Objectives

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The top-down business case and the bottoms-up benefits case are two
very different beasts that are often confused
Top-down
Business Case
Bottoms-up
Benefit Case
=
=
A collection of analysis
stream findings translated
into financial and non-
financial improvements
Explains why getting these
benefits matters to the
business
• Top-down approach
• Models the impact on financial
statements
• Relates delivery to strategy
• Is an executive steering group process
• Bottoms-up approach
• Displays mixed benefit formats
• The logic is as important as (if not more
important than) the numbers
• This is a work stream process
The two components are highly inter-dependent, but it is important to understand the
distinction and that work is structured around it.
Quantitative Analysis Elements – Top-down & Bottoms-up Approaches

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The combined top-down and bottoms-up approaches triangulate to
form the final business case
Final
Top-down
Business
case
Final
Bottoms-up
Benefits Case
Aspiration
Hypotheses
Benchmarks
Baseline
Implementation
Prioritization
Leveraging the
Opportunities
Analysis
Preliminary
Top-down
Benefit
Evaluation
Benefit
Scope by
Area
Final
Business
Case
Realized
Benefits
Focus on
Major Benefit
Levers
$$$
Bottoms-up
Approach
Top-down
Approach
Proposed
Issues
Quantitative Analysis Elements – Top-down & Bottoms-up Approaches (3 of 3)

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Financial
Decomposition
Opportunity
Identification
Opportunity
Quantification
Benefit
Validation
Business Case
Finalization
1 2 3 4 5
 Decompose the
organization s
financial situation by
understanding
economic drivers of
the business
 Understand the
financial projections
and historical trends
 Based on the
financial analyses in
the first phase,
conduct studies
around the key levers
identified
 Develop a financial
baseline
 Quantify the
opportunities
identified and
develop benefit logic
 Create opportunity
charts for each
opportunity
 Define financial and
operational
assumptions
 Validate the benefit
logic with key
process owners in
the business
 Obtain sign-off from
key stakeholders in
the organization
 Design a cohesive
project with clear
linkages to the
benefits identified
 Define payback
assumptions
Business Case Development Approach
The business case development process begins with a financial
decomposition of the organization to search for opportunities

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Financial
Decomposition
Opportunity
Identification
Opportunity
Quantification
Benefit
Validation
Business Case
Finalization
Phase 1, 2 – Financial Decomposition &
Opportunity Identification
As you identify potential benefits, map these benefits against the
attributes of quantifiable and financial
The Benefits Matrix is an important tool to organize and structure identified benefits.
Understand the
company s
financial levers
Focus stream
efforts at points
of greatest
leverage
Understand the
impact of
identified
benefits on
company
financials
Financial Non-financial
The benefit s
financial impact is
clearly identifiable and
measurable
The benefit is non-
financial, but has a
measurable impact
There is a financial
impact, but it cannot
be estimated
accurately
This section includes
non-financial benefits
that are difficult to
measureQuantifiableNon-quantifiable
BENEFITS MATRIX

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Financial
Decomposition
Opportunity
Identification
Opportunity
Quantification
Benefit
Validation
Business Case
Finalization
Those benefits identified as both financial and quantifiable may
eventually be captured in the business case financial model
Financial Non-financial
Examples
 Increased sales
 Increased delivery time
 Reduced operating costs
Examples
 Customer satisfaction
 Service quality
 More stable field force
team
 Increased employee
morale
Examples
 Customer retention
 Retail alignment with
strategy
 Effective work processes
Examples
 Improved
communication
 Increased teamwork
 Enhanced reputation
with suppliers
QuantifiableNon-quantifiable
Financial Non-financial
These benefits
can be captured
quantitatively in a
financial model
Capture qualitatively
Capture qualitatively Capture qualitatively
QuantifiableNon-quantifiable
Only those benefits that are both Financial and Quantifiable can be modeled
into the final financial model.
Phase 1, 2 – Financial Decomposition &
Opportunity Identification

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Financial
Decomposition
Opportunity
Identification
Opportunity
Quantification
Benefit
Validation
Business Case
Finalization
Any financial and quantifiable benefit must fall into one of five benefit
categories
Financial Non-financial
Capture
quantitatively
Capture qualitatively
Capture qualitatively Capture qualitatively
QuantifiableNon-quantifiable
Categorize the financial, quantifiable benefits into the 5 benefit categories for
structure in the financial model.
All Financial and
Quantifiable benefits
must fall into 1 of 5
benefit categories
Revenue
Enhancement
This benefit will increase revenues (e.g. service
upsell)
Cost Reduction This benefit will reduce (but not eliminate) a cost
Cost Avoidance This benefit will allow the company to avoid (i.e.
eliminate) a cost completely
Capital Reduction Similar to Cost Reduction, but reducing a capital
expense (as defined by Corporate Finance/
Accounting)
Capital Avoidance Similar to Cost Avoidance, but avoiding a capital
expense (as defined by Corporate Finance/
Accounting)
BENEFIT CATEGORY DEFINITION
1
2
3
4
5
Phase 1, 2 – Financial Decomposition &
Opportunity Identification

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Financial
Decomposition
Opportunity
Identification
Opportunity
Quantification
Benefit
Validation
Business Case
Finalization
Phase 3 – Opportunity Quantification
These benefits must then be quantified and translating into specific
financial impacts
Categorize the financial, quantifiable benefits into the 5 benefit categories for
structure in the financial model.
PROFIT & LOSS IMPACTS
BALANCE SHEET IMPACTS
CASHFLOW IMPLICATIONS
Gross benefit
Investments
Net
benefit
Financial Non-financial
Capture qualitatively
Capture qualitatively Capture qualitatively
QuantifiableNon-quantifiable
Revenue Enhancement
Cost Reduction
Cost Avoidance
Capital Reduction
Capital Avoidance
• Ultimately, benefits must be
quantified and translated
into impact on the
company s financials
• P&L impacts
• Balance Sheet impacts
• Cash Flow implications
• Analyses should be
presented within the context
of investment required and
timeframe for benefits
realization (e.g. payback
period)

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Financial
Decomposition
Opportunity
Identification
Opportunity
Quantification
Benefit
Validation
Business Case
Finalization
Phase 4 – Benefit Validation
It is critical to validate the legitimacy of identified benefits, as well as
the legitimacy of its calculations
An invalid benefit results in an invalid business case—executives will not believe your
numbers if they don t believe in the benefits.
Define Benefit X
Define calculation
for Benefit X
Valid? Valid?

Define Benefit Y
Define calculation
for Benefit Y
Valid? Valid?

Define Benefit Z
Define calculation
for Benefit Z
Valid? Valid?

Validate the legitimacy
of the identified benefit
Validate the legitimacy
how you are planning to
calculate the benefit • Validation of both the benefit
itself, as well as how its
calculated is a crucial step
• If executive members or key
stakeholders do not agree with
the benefit or its calculation,
they will not believe in any of
your resulting financial
analysis
• Validate first before
proceeding with financial
modeling

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Financial
Decomposition
Opportunity
Identification
Opportunity
Quantification
Benefit
Validation
Business Case
Finalization
Phase 5 – Business Case Finalization
The financial modeling process involves calculating key financial
metrics, such as ROI and Payback Period
Define key assumptions and financial metrics to drive financial modeling
COMMONLY USED FINANCIAL BUSINESS CASE METRICS
Timeframe Most business case for capital budgeting models have a 5-year timeframe.
Discount / Hurdle Rate By definition, this is the minimum acceptable rate of report for any internal project
that the company takes on. This is defined by Corporate Finance and for most
companies, it is 10% (annually). This value is crucial, as it drives all the key
financial calculations (e.g. NPV, ROI).
Net Present Value (NPV) NPV is a concept used to measure present value of future cash flow. This is done
by discounting the cash flow by the discount rate. E.g. with a discount rate of 10%,
the NPV of $5MM in year 2 is $5MM/(1 + 10%)2
Return on Investment
(ROI)
ROI is a performance measurement of how profitable the project or investment was.
It is a percentage symbolizing the profit as a percentage of total investment.
Usually, we calculate the ROI for the snapshot at the end of the 5-year timeframe.
Payback Period This is the time it takes for a project to recover its initial costs and start generating a
positive return for the company. Since most models are set at a 5-year horizon, the
payback period should occur within 5 years.
Source: Investopedia (for more information)
If these
concepts are
new to you
and unclear,
examine the
calculations
used in the
embedded
Excel model
(on slide 25).

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Financial
Decomposition
Opportunity
Identification
Opportunity
Quantification
Benefit
Validation
Business Case
Finalization
Phase 5 – Business Case Finalization
The financial model provides a summary of the benefit case, cost of
investment, and calculated financial metrics to help drive to a decision
Financial Benefits
Breakdown of the quantifiable,
financial benefits broken down
by Revenue Impact, Cost
Impact, and Capital Impact
Cost of Investment
Breakdown of the
costs involved
Cash Flow Analysis
Core Financial Metrics
Source: This screenshot is taken from the Excel spreadsheet included with this presentation (slide 25)

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Sample Business Case Model
As you identify potential benefits, map these benefits against the
attributes of quantifiable and financial
Double click to open the
Excel financial model
NOTE: If you are having trouble opening the embedded Excel file,
you can download it online at this web address:
http://learnppt.com/downloads/bcasemodel/

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Developing a successful business case is straightforward if you follow
a few simple tips…
DO s DON’T s
 Ask for help/advice when
struggling
 Come with a range of possible
situations/activities that need
prioritising rather than a list of
problems
 Leverage the network with the
organization
 Listen, think, and speak in that
order
 Making unsubstantiated statements (present hypotheses as
hypotheses)
 Using data before you are sure you understand what it represents
(definitions) and that it is uncorrupted and consistent
 Extrapolating from an insufficient data sample (without being very
clear that you are doing so and noting the implications)
 Making assertions or promises to stakeholders without being sure
they are true/you can keep them
 Carrying out analyses/writing panels without being sure they are
adding value to the project
 Presenting unsourced data or conclusions that rely on
undocumented assumptions
 Guessing/bluffing—“I don’t know (yet)” is always better
Dos and Don ts

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… and avoid the common pitfalls!
 “Oh data, you wanted me to get data!”
– Lots of war stories but no data
 “There is no data”
– Sadly, too often this means the speaker is too lazy to plug through reams of paper to get at the data
 Staying in data gathering and analysis mode
 Stating the obvious
– “Increasing margins will improve profits.”
– We are looking for the “So-Whats”—keep on digging until you find them.
 Finding a gold mine and quantifying the value of the shack built on it
– Too often we get bogged down in the detail and forget the bigger picture
 “Validate, validate, validate—oh, does that mean I should have validated my analysis?”
– People are validation—averse because they do not understand the process or are afraid it will be abused
 Letting the team dictate where the benefits will end up
 Not plugging in to the authorisation network and selling strategy discussions
 Staying holed up and not understanding each study’s findings and opportunities
COMMON PITFALLS
Common Pitfalls

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Utilize these rules of a thumb as a sanity check and to help focus your
business case development activities
 Start the quantification process early on
 Obtain early stakeholder or executive buy-in
– Baselines, findings, assumptions, etc.
 The information you need will probably not be what the organization currently tracks in the financial
systems
 Do not underestimate the importance of the business case
 Focus on both financial and intangible benefits
 Follow the Pareto Principle / “80/20” rule
 Understand the business not just the numbers
 The benefit logic (how) is as important as the numbers
RULES OF THUMB
Rules of Thumb