Customer value is not a static concept. Customers change their usage and recharge patterns, and therefore the value they generate, in response to the different actions taken by us and also by our competitors. The changes (in usage intensity, internal migration and churn) can be tracked over time for an operator and can be also compared across operations.

Provided with enough data, we can also establish the link between marketing actions with impact on changes on usage pattern, and those with impact on value creation in order to provide additional guidance.

Following the evolution of segments and portfolios becomes critical…

  • Managing the customers using a portfolio approach provides with an effective way to understand the customer base dynamics at a high-level

  • Our classification looks at value and price-sensitivity (using usage mix as a proxy) as the classification factors

  • We identify three “flows”

  • Migrations, the customer changes either the intensity or mix of consumption

  • Churn, customers stop using the service

  • Acquisition, very often the changes in revenue are caused by changes in tariffs

  • All these factors can be combined to assess the quality of the acquisition efforts and the channel policies

 

To understand how marketing actions impact usage patterns and revenue…

  • The changes in top- and bottom- line can be  tracked to different factors
  • Number of users, the first factor is to identify the number of actual users
    This is different from the number of SIM cards!
  • Usage intensity, product mix, often hard to untangle
  • A typical case is the substitution of phone calls by SMS
  • Tariffs, very often the changes in revenue are caused by changes in tariffs
  • Of course changes in usage may be caused by changes in tariffs
  • Only a detailed analysis of the usage-based segments allows to identify the impact of the different root-causes and provide guidance on the best course of action

 

and how competition impacts the acquisition and retention efforts

  • Across-the-base churn rates and gross adds tell an incomplete story
  • We provide a more nuanced pictureto help the operator focus its effortsin the most critical areas
  • This also provides a better predictor of future revenue evolution