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Catch the Right Customers

2015.05.01 By Jonathan Hopkinson


There is value to be found when telcos segment their users, but some segments are more valuable than others. We identify six useful categories for telecoms, assess their priorities, and determine which you may want to focus on.

Challenging times

Even with modern customer experience management solutions, telecoms find it challenging to design, deliver and assure the optimum experience for each end-user. A “one-size fits all” approach to customer experience delivery is inefficient at best and often harmful. So which users should your business focus on, what do they need and expect from you, and how do you deliver it?

In this article we share some consumer research recently conducted by Huawei’s Customer Experience Transformation Center (CETC) which answers these questions for the general case. The answers are quite revealing, with some customer segments much more desirable than others, and each group having distinct priorities.

Key customer segments

Analysis of over 3,000 survey respondents, sampled across mature mobile markets, has revealed six distinct customer groups, differentiated by their main motivation for owning a mobile device.

Business-focused:Device used primarily for business purposes. Seeks reliable network quality, particularly for voice, together with a high level of customer care.

Value-chaser:Driven by price. Spending money begrudgingly, this user seeks first-class service, but at an economy price.

Family-focused:Device mainly used for maintaining contact with family members. Seeks reliable coverage, particularly in the home.

Entertainer: Uses device for watching videos and playing games. Seeks high-speed data, and is an early adopter of new services. Youthful, with limited disposable income.

Socializer: Device primarily used to access social networking sites. Seeks reliable data and application performance.

Heavy User:Consumes large volumes of data for video and applications. Seeks high data speeds and large data bundles.

Whom to target?

Your business strategy may already include the targeting of particular customer segments based upon your own unique competitive environment and specific business goals, but are these really the right customers for you? Let’s take a look at the most desirable customer segments in general.

The chart in Figure 1 provides some guidance on this. Each of the customer segments are compared by customer lifetime value (CLV) and their net promoter score (NPS) for network service. In effect it shows their value to you in terms of direct revenue together with their likelihood to recommend your network service to others. The size of the circle represents the relative size of each segment, while the CLV is normalized to U.K. spending levels.

Although NPS is generally low, as is typical in the telecom space, it is clear that some customer segments are more likely to recommend their service provider than others. There is also a significant difference in CLV between customer segments. Using these criteria, the upper right area of the chart is the sweet spot. Socializers for example, offer a high CLV as a result of high ARPU combined with a lower propensity to churn, and they also have a relatively high NPS. In contrast, value-chasers offer a much lower CLV, and are less likely to recommend you to others.

In addition to socializers, another potentially valuable customer segment is the business-focused group who, although demanding, do have considerable CLV. The large group of heavy users is also attractive, being most likely to recommend your network service, and with a relatively high CLV.

Attracting the most value

Building on our example above, the most important factors which would attract the heavy user, socializer and business-focused customer segments to switch to your business are shown in Figure 2.

Interestingly, none of the most valuable customer segments cite price as the most important factor. The typical heavy user prioritizes higher data speed; you can attract them by offering and promoting high levels of data speed. The Huawei SmartCare CEM solution can support you by monitoring the data speeds being delivered to similar existing users across your network, identifying any faults and areas for improvement, while also generating quantitative data to support associated marketing campaigns.

Typically, the socializer and business-focus customer segments prioritize coverage.

Your case, like every case, is unique

The case listed above is just an example; our experts at CETC can partner with you to apply the same analysis to your own market, identifying those customer segments key to the success of your business. The SmartCare CEM solution can then help you attract and retain these essential customers, delivering real business value.

Figure 2: What factor would attract you to change service provider?

Figure 3: % Respondents prioritizing specific areas of good coverage

Figure 4: Reasons for Past Churn