The Homa Files

Excerpted from the McKinsey Quarterly, “New ideas for customer segmentation”

* * * * *

Customer life-cycle management, though a likely and proven strategy, presents a vexing challenge to prepaid mobile operators. They often resort to blanket promotions that risk destroying value by needlessly cutting prices or offering free services.

One alternate way is for marketers to look more closely at their billing systems, which contain a wealth of information; to create segments, often as small as 100,000 subscribers; and to plan tailored promotions for each group.

The exhibit below illustrates one prepaid mobile operator’s strategy to reduce churn rates by segmenting subscribers through their usage patterns. Tracking the number of days before a customer is “lost” helped the company to introduce promotions most likely to increase usage and retention while minimizing revenue lost to scattershot offers and unnecessary discounts.

* * * * *

Edit by DAF

* * * * *

Full article:
https://www.mckinseyquarterly.com/newsletters/chartfocus/2008_11.htm

* * * * *

Want more from the Homa Files?
Click link =>  The Homa Files Blog

* * * * *

This entry was posted on December 3, 2008 at 7:04 am and is filed under Mktg - CLTV, Mktg - CRM, Telecom. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.