Segmentation Applications in Telecommunications - Data Mining Techniques in CRM: Inside Customer Segmentation - page 331

SUMMARY

In this chapter we have followed the efforts of a mobile telephony network
operator to segment its customers according to their usage patterns and their
value. The business objective was to group customers in terms of their profit and
their behavioral characteristics and to use this insight to deliver personalized and
value-driven customer handling. The organization initially focused on residential
postpaid customers, who were further segregated into five behavioral and five
value-based segments, as summarized in Table 7.15.

Table 7.15 The mobile telephony segments.

Residential customers Postpaid - contractual

Value-based segments Behavioral segments

Platinum Oldies - basic users

Gold Adults - classic social users

Silver Young - SMS users

Bronze International users

Mass Business users

Prepaid

Business customers Large business - corporate

Small and medium enterprise (SME)
Small office, home office (SOHO)

The procedure followed for the behavioral segmentation included the appli-
cation of a PCA model for data reduction and a cluster model for revealing distinct
user groups. Furthermore, a decision tree model was also applied to profile the
segments and compile a set of understandable scoring rules for updating the
segments. The whole process is depicted in Figure 7.15.