RFM based Segmentation: An Analysis of a Telecom Company’s Customers
RFM based Segmentation: An Analysis of a Telecom Company’s Customers

Summary/Abstract: The purpose of relational marketing is to keep subscribers with the company and increase their loyalty. Carrying out successful marketing for both retaining customers and enticing them to continue consuming in the future is an extremely important goal in today‘s competitive environment. To meet these targets, companies need to offer subscribers services as close to their needs as possible, which is possible only if they divide the market in customer segments. The hereby survey will pursue the behavioural patterns of a telecom operator‘s prepaid subscribers‘ base, considering the variables taken into account in the RFM analysis. The analysis will segment clients based on the date of their last recharge, the frequency of their three months recharges and the value of the recharges in this interval. To identify consumer segments we used the K-mean cluster analysis. To assess the internal cohesion of the clusters we used the average sum of squares error, and to determine the differences between clusters we used the ANOVA and Tukey post-hoc tests. The study led to the identification of eight customer segments with different behaviours, the results providing the telecom carrier with the possibility to better match its marketing strategies with the subscribers‘ needs.

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