Segmentation Applications in Telecommunications - Data Mining Techniques in CRM: Inside Customer Segmentation - page 300

Figure 7.2 The Data Audit tool in IBM SPSS Modeler for initial data exploration.
VALUE-BASED SEGMENTATION
All customers are not equal. Some are more valuable than others. Identifying those
valuable customers and understanding their importance should be considered a
top priority for any organization.
Value-based segmentation is one of the key tools for developing customer
prioritization strategies. It can enable service-level differentiation and prioritization
of churn prevention activities. The marketers at the mobile telephony network
operator decided to develop a value-based segmentation scheme in order to assign
each customer to a segment according to his or her value. They believe that this
segmentation will enable them to separate valuable customers from the rest and
provide insight into their differentiating characteristics.
The value-based segmentation was based on the previously calculated mar-
ginal revenue for each MSISDN. Thus, all MSISDNs were ranked according
to their MARPU. The ordered records were divided (binned) into equal-sized
subsets, or quantiles, and these tiles were then used to construct the value
segments.