Recharge-Based segmentation, presentation from Telecommunication Customer Segmentation and Intelligence Conference. Increasing Revenue of Prepaid Customers by Recharge Segmentation Models Recharging behavior of telecommunication customers - prepaid clients segment. Recharge-based segmentation

1. IIR Conference extract, Amsterdam 2011
Telecommunication Customer Segmentation & Intelligence
Increasing Revenue
of Prepaid Customers
by Recharge Segmentation Models

2. If you persist in trying to be
all things to all people, you will fail.
Seth Godin, We Are All Weird

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OUR CLIENTS

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PREPAID CHALLENGE
How to influence customer to recharge more & increase ARPU?
How to approach (segment) them?
Quantity Lack of information
Prepaid customers

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PREPAID CHALLENGE
• Little demographic data
• Only reliable – behavioral data
usage & recharges
Lack of information
Prepaid customers

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RECHARGING BEHAVIOR
Regular Keeping account alive
When no moneyOccasional irregularities

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BEHAVIORAL-DEMOGRAPHIC
SEGMENTATION
• survey / usage / demographic data
■ strategic – for overview
■ hardly applicable segmentation
- mapping surveys to population
■ no direct link
■ static
■ unreliable & weak data coverage
„kids” „seniors”
„women at
home”
„young
active biz”
„heavy
multimedia
user”
Revenue

10. RECHARGE-BASED
SEGMENTATION
■ based on reliable recharge data
■ trigerred by customer actions
„Regular” „Irregular1”
„Keeping
alive”
„When
empty”
„No simple
pattern”
■ Directly applicable to revenue
generation
■ Dynamic – reflects current behavior
■ Reliable data
Revenue

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PROBLEM & SOLUTION
How to approach Prepaid users?
t
Recharge
Credit recharging pattern
Estimated recharge
date for each customer
Predictive
models
do segmentation based
on recharging patterns
adapt message
to recharge segment
send timely
marketing message

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Data
Recharge
history
sequence
Prepaid
transactions
DWH
WHERE IT FITS
Marketing actions
Increase recharge
amount
Recharge
earlier
Shorten recharge
period
…
Scoring models
Estimated
recharge date
Segmentation
by recharge
behavior
Classical
segmentation

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7 recharges / year
EFFECT OF INFLUENCING RECHARGE PATTERN
t
Recharge
classical
segmentation
9 recharges / year: +2 avg recharges / customer
t
Recharge
recharge
date
estimation
+10 € per user * 100 000 responding customers = +1 million € revenue

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FURTHER APPLICATIONS OF RECHARGE MODELS
Up-selling
activities
Anti-churn
incentives
Retention
activities
Recharge
history
sequence
Recharge
predicting models
t
Recharge
Estimated recharge
date for each customer

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BENEFITS OF RECHARGE-BASED SEGMENTATION
Recharge-
based
segmentation
Availability
of reliable data
Directly
links to profit
generation
High model
accuracy
& increased
response
Clear savings
• small but
cumulating
• low cost
Profit
Costs

16. Average is for marketers who don’t have
enough information to be accurate.
Seth Godin
Recharge-based segmentation
■ Direct
■ Dynamic
■ Reliable data
High response
& Revenue increase

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