Database Reference
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into broader groups through the ''Reclassify'' node which mapped the original
quantiles into the value-based segments. The derived ''VBS'' field is the final result
and indicates the value-based assignment for each user.
VALUE-BASED SEGMENTS: EXPLORATION AND MARKETING USAGE
The next step before making use of the derived segments was the investigation of
their main characteristics.
The initial goal of this segmentation was to capture the assumed large-scale
differences between customers, in terms of value. Thus, the marketers began to
investigate this hypothesis by examining what each segment represents in terms of
revenue. Table 7.4 presents the number of MSISDNs and the percentage of total
MARPU for each value segment.
This table shows that a substantial percentage of revenue comes from a
disproportionately small number of high-value users. Almost half of the operator's
revenue arises from the top three value segments. Thus, 20% of the most valuable
users account for about 50% of the total MARPU. On the other hand, low-value
users which comprise the mass (bottom 40%) segment provide a disappointing
13% of the total revenue. The comparison of mean MARPU values also underlines
the large-scale differences among segments. The mean MARPU value in the
top 1% segment is more than 17 times higher than that for the bottom 40%.
These findings, although impressive, are not far from reality. On the contrary, in
other markets, in banking for example, things are even more polarized, with an
even larger part of the revenue originating from the top segments of the value
pyramid.
Table 7.4
Value-based segments and MARPU.
Percentage of
Sum % of Mean
MSISDNs
MARPU MARPU
Value-based
segments
First class (PLATINUM Top
1%)
1
6
219
Second class (GOLD Top 4%)
4
14
129
Third class (SILVER High
15%)
15
30
74
Fourth class (BRONZE
Medium 40%)
40
37
34
Fifth class (MASS Low 40%)
40
13
12
Total
100
100
37
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