Know-How Exchange : Customer Behavior

One main rule about segmentation factors:

"Whatever makes sense to the business"

I prefer to use factors that describe addressable matters, such as demographic, geographic or psychographic characteristics.

For telecoms users, that might mean...
- where they live
- what they earn
- where they call to (i.e. mainly local, mainly long distance, mainly overseas)
- times of day they call
- usage for business or personal
- usage of add-on services (voicemail, call waiting, call-back, conferencing, etc).

You might want to look at other factors, i.e. pre or post-paid, product usage - fixed line or mobile, internet or pay-TV if you sell those services too. You might look at heavy versus light users.

Whatever you choose, don't use too many, but do make them meaningful!

ChrisB

hi deepti

i agree with Chris.

also i think segmentation should be done on the basis of the socio-economic condition of the country/territory you are operating in.

here in my country, i have seen telecom companies segment customers on the basis of usage and billing. those are very high users and who dont bother about bill, Post-Paid connections are targeted towards them.

whereas those who need basic telephone needs and are conscious about their telephone expenses, Pre-Paid connections are targeted towards them, as pre-paid connections actually put a brake on your telephone related expenses.

operators are also segmenting consumers with their purchasing power. when mobile phones first came, it used to cost more than US$1000 to get a mobile connection and it was only limited to the elite and enjoyed all benefits like SMS, connection to land lines etc. then operators targeted the value for money segment whereby you can only call to other mobile, no land phone connectivity. this connection was priced very cheap as low as US$ 16, prepaid version of which is now available at US$5 only.

then again, telecom players are segmenting customers on the basis of age group. companies are introducing new service brand specifically targeted towards teen-agers and young segment. some operators are providing extra value added services (VAS) towards this segment. they are enjoying reduced charges on SMS and get other benefits like loyalty card.

again type of consumer, like corporate and individual customers enjoy different benefits from the same operator. Corporate clients are enjoying reduced Line Rent and other call charges.

so segmentation depends on what is the socio-economic composition of the your market and also what makes business sense. closely watch what kind of telecom service they are NOT enjoying in which segment. then based on that you can segment your customers.

hope this helps.

cheers!!

hi deepti

i agree with Zahid's word of caution, dont segment too much, it will lead to fragmentation. do remember to follow his advice.

Zahid, thank you very much, i learnt a lot from that. will keep those in mind when i try to join a telecom company ;-))

btw, deepti, i am assuming you are from India???

anyway, replying to your queries, from Bangladesh perspective....

1. The highest revenue generating segment per subscriber is definitely Post Paid segment. this segment consists of mainly Coporate clients and businessmen and business houses. although segment amounts to about 30% of the total market all the players are fighting for a larger pie of this segment and seems a must-have. But as a whole segment the Pre-Paid is more revenue generating due to its sheer volume (more than 70% of the market is pre-paid).

2. its almost impossible to tell the usage level in each segments, as no operator is going to tell the usage level. you have to research your market to understand.

3. till now, the need is basic telephone needs. cheap call rates, 1 sec pulse and billing, sms, push-pull informations from sms, international sms etc. the service and needs are almost same in all segments. in case of corporate connection, data transfer, email and browsing is another product/sevice that is in need. in case of post paid subscribers, voice mail box, call conferencing, call waiting etc. are offered.

4. till now the entire market of all segments is receptive to new ideas. but the teen-agers/young generation is most receptive, obviously. another receptive segment is pre-paid subscribers as long as the rates are really cheap.

hope this helps.

cheers!!