Segmentation Applications in Telecommunications - Data Mining Techniques in CRM: Inside Customer Segmentation - page 312

Table 7.8 ( continued )

Derived Components

Component Label and Description

6 Roaming usage

Component 6 measures roaming usage (making calls when abroad)

7 International calls

Component 7 is associated with calls to fixed international networks

8 Events and GPRS

Component 8 measures event calls and traffic. GPRS traffic is also mod-
erately loaded high on this component

9 Internet usage

Component 9 is associated with Internet usage and GPRS traffic

10 MMS usage

This usage is measured by component 10

11 ACD (Average Call Duration)

Fields denoting ACD for incoming and outgoing voice calls are related
and combined to form component 11

12 Frequency of usage

The frequency of usage, that is, the days in a month with any type of out-
going or incoming usage, is represented by component 12

The resulting 12 components retained more than 80% of the variance of the
original fields. This percentage was considered more than adequate and thus the
only task left before accepting the components was their interpretation. In practice
only a solution consisting of meaningful components should be retained.
So what do these new composite fields represent? What business meaning
do they convey? As these new fields are constructed to substitute for the original
fields in the next stages of the segmentation procedure, it is necessary that they be
thoroughly decoded, before being used in upcoming models.
The component interpretation phase included an examination of the rotated
component matrix, a table that summarizes the correlations between the compo-
nents and the original fields, that is, Table 7.7.
The ''interpretation'' results are summarized in Table 7.8.
The explained and labeled components and their respective scores were
subsequently used as inputs to the clustering model. This brings us to the next
phase of the application: the identification of useful groupings through clustering.