Segmentation Applications in Telecommunications - Data Mining Techniques in CRM: Inside Customer Segmentation - page 326

- Competitive pricing.
- Optimum rate plan.
• Needs/wants:
- Phone used as a business tool.
- High-quality services and guaranteed availability at competitive prices.
- ''Always connected.''
Marketing Approach
• Product/services offered: Offering of business rate plans with free minutes
and discounts on voice usage. Offering of incentives for handset replacement.
• Communication channel: Direct voice calls, direct mail.
• Advertising channels: News channels and stations, newspapers, business
magazines.
• Brand image communicated: Trustworthy, high-status company, the choice
of successful people.
SEGMENTATION DEPLOYMENT
The final stage of the segmentation process involved the integration of the derived
scheme into the company's daily business procedures. From that moment all users
were characterized by the segment to which they were assigned. The deployment
procedure involved a regular (on a monthly basis) segment update for the needs
of which a specialized classification model was developed. More specifically, a
decision tree model (C5.0) was trained, using all the initial clustering fields as
inputs and the segment membership field as the target. The generated model was
used not only to gain insight into the segments, but also as a scoring engine for
allocating new records to the established clusters. Although the generated cluster
model has been saved and could also be used for scoring, the decision tree solution
was preferred due to its transparency. Decision trees translate the distinct profiles
of the segments into a set of intuitive rules, similar to common business rules.
Therefore they facilitate a clear understanding of the defining characteristics of
each cluster and enable simpler communication within the organization. Moreover,
they are easier to handle, allowing possible interventions in and modifications to
the assignment procedure, if considered necessary.
A part of the resulting decision tree is shown in Figure 7.13. Although only the
top two levels of the tree are presented here, the beginning of segment separation
is evident. Additionally, a subset of the tree's rules is shown in Figure 7.14.
Classification rules were identified for all segments. All records passing
through the generated model are allocated by these rules to the segment that best