Profiling key to customer retention

23 Jun 2006
00:00
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Summit highlights

While mobile operators in high-penetration markets have been forced to shift their focus from customer acquisition to customer retention, most have looked to find ways to boost usage of data services across their entire sub base. But any retention initiative, said Mark Williams, Amdoc's VP for Asia Pacific, needs to be underpinned by careful customer segmentation strategies that take profit into account.

He stressed that retention is not a valid strategy for all customers as some customers churn naturally as their circumstances necessitate they change providers. Others will churn involuntarily - for example those that don't pay - while others will leave because they are sensitive to prices changes.

'Some customers aren't worth retaining,' he said, adding that ARPU is not a valid metric to decide this. 'ARPU is not enough - often customers with the highest bills are not the most profitable.'

'Efforts should focus on high-value segments based on a sensible measure of profitability and the expected lifetime value,' said Williams, who spoke yesterday at a CommuicAsia2006 Summit session on 'Building Customer Loyalty and Value.'

At the same time as handsets can increasingly support a growing range of non-voice services, customer expectations are rising, so Williams said it's vital to actively nurture existing profitable customers.

He pointed out that churn management models must be built on reliable data.

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