Customer Analytics Case Study: Segmentation and Targeting Strategies

This case study explores how Telco Company used customer analytics to segment their customers based on geography, behavior, and demographics. The report delves into their chosen target segment and provides recommendations for improving conversion rates and personalized experiences. Techniques such as RFM analysis and customer lifetime value are discussed, along with the use of pay-per-click advertising and cost-per-click metrics.

Customer Analytics Case
Study

Contents
INTRODUCTION...........................................................................................................................1
DATA ANALYSIS .........................................................................................................................1
CUSTOMER SEGMENTATION ..................................................................................................1
TARGET SEGMENT .....................................................................................................................2
RECOMMENDATIONS ................................................................................................................3
STATEMENT OF INTENT............................................................................................................3
REFERENCES................................................................................................................................5

INTRODUCTION
Customer analytics can be understood as practices which are used for identifying and
understanding the needs, composition as well as satisfaction level of buyers in a strategic manner
(Hossain, Akter and Yanamandram, 2020). Customer analytics is considered as beneficial for
improving profit margins, enhancing loyalty as well as increase company's sale. For
understanding the customer analytics effectively, data sets of Telco Company is taken into
consideration. Data sets are provided by taking 7043 observations which are bifurcated on the
basis of country, state, phone service providers, people who like streaming television, movies,
payment method, customers who indulge in paperless billing and many more. Customer
segments are created on the basis of geographical, behaviours and habits. This project report
delves an understanding about choosing market segments and how to increase their revenue as
well as ways for accomplishing desired goal.
DATA ANALYSIS
Techniques used for collecting data is primary analysis. This data is collected through
insights gathered by officials of Telco Company. This has been collected through billing and
shipping invoices, purchased products or services, payment methods, reason for procuring,
marketing channel which helps in increasing conversion rates. After collection of the data, it has
been analysed through purchasing attributes in regards with purchasing behaviour as well as
spending patterns of customers. RFM strategy is also used by officials of Telco Company which
is used to identify customers on the basis of recency of last purchases, frequency of last
procurement, as well as monetary amount they have spent.
Demographics are also used by marketers for gathering and analysing the data for
formulating effective insights on the basis of gender, age, income level, preferences and many
more (Jham, 2018). Officials of Telco Company has used demographics and RFM strategy for
analysing their collected data.
CUSTOMER SEGMENTATION
Customer segmentation can be described as a way of splitting consumers into varied
groups on the basis of specified characteristics that are shared by them in a collective manner
(Hung, Lien and Ngoc, 2019). Varied customer segments that are created by officials of Telco
Company are on the basis of geographical, behaviour, demographic and many more. These
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segments are bifurcated strategically for choosing a target audience segment. Geographical
segment is segregated on the basis of country, state, city and postcode. Geographical segments
are created for people of UK residing in London. Behavioural segmentation is described as
practice of analysing observed behaviours which can be indicative for future actions. These can
be changed with changing market dynamics ans desires of people. On the basis of behavioural
segment, officials of Telco Company has bifurcated their customers on the basis of using internet
for streaming TV and movies as well as preference of paperless billing in an effective manner.
On the basis of demographics, officials of Telco Company have bifurcated their customers
segment on the basis of gender, namely, male and female.
TARGET SEGMENT
One customer segment which is chosen by officials of Telco Company is the one which
is created on the basis of geographical needs. RFM analysis is considered as data-driven
customer segmentation technique. This is based on the idea of segmenting customers on the basis
of their last purchases, how recently they procure products or services as well as spending
patterns (Heldt, Rilveira and Luce, 2021). Geographical segmentation is chosen by Telco
Company as it allows companies to market their products or services in a cost-effective manner.
This help in enhancing customer experience in a strategic manner. This also aid officials of Telco
Company in having better understanding about their customers which allows them to make
customization in their products or services. Through this, business houses can easily make their
reach to potential customers who are living nearby.
Officials of Telco Company have to target people on the basis of geographical needs
through their marketing activities. Officials of Telco Company can use marketing technique by
telling a compelling narrative of brand to their targeted customers for engaging them. They can
also show their reviews and feedbacks through content marketing strategies in a strategic
manner.
With the help of RFM analysis, officials of Telco Company have chose geographical
basis for targeting as they have evaluated that their purchasing patterns and spending abilities in
a strategic manner.
Customer lifetime value is described as a measure for evaluating average revenue which
is generated by customers during their entire relationship with an establishment (Zong and Xing,
2021). Customer value can be calculated through eliminating total customer costs from buyer
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benefits. On the basis of this framework, officials of Telco Company have chosen geographical
basis for targeting as through this they can reduce their advertising cost by marketing their
products to the whole audience.
RECOMMENDATIONS
It is recommended to officials of Telco Company to identify their target customers
through RFM strategy for providing a personalised experience and make improvements in
conversion rates in an effective manner. It is advisable to officials of Telco Company to take
help of online marketing specialists for improvising their market campaigns. It is imperative for
them to engage in PPC activities for ensuring that they are targeting their chosen segment and
not wasting their money in advertising campaigns. Officials of Telco Company can use paid
advertising strategy through posting their advertisements through Google for a specified range of
area. Google ads offers a range of excellent options which can be apt for officials of Telco
Company to target their geographic locations in an effective manner. This strategy is considered
as beneficial for them to target their specified states, postal codes in an effective manner.
Through using Google Ads, officials of Telco Company can set advanced setting and select
proximity targeting. Through this, officials of Telco Company can also exclude those customers
which they do not want to target.
It is imperative for officials of Telco Company to analyse their gathered data sets through
RFM analysis. This is considered beneficial for them as they can bifurcate their collected data on
the basis of relevancy, frequency and spending patterns in an effective manner.
STATEMENT OF INTENT
Statement of intent can be described as descriptive document which creates an outline for
a potential research area that companies would like to undertake in an effective manner
(Werhane, 2019). Chosen customer segment for this project report is geographical sector.
Geographical segmentation encompasses of targeting a specific set of audience on the basis of a
specified region in which people hail from. It essentially works on a principle which allows
people of specific need, desires, cultural considerations targeting through one feature.
RFM strategy and Customer lifetime value techniques are taken into consideration by officials of
Telco Company for collecting as well as bifurcating their data sets for targeting customers in an
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effective manner. They also use demographics technique for collecting as well as bifurcating
their data sets for gaining insights regarding their customer segments.
For connecting with audience on the basis of geographical needs, pay per click advertising
strategy can be used by officials of Telco Company for enhancing their profits. Officials of Telco
Company can use telling their brand narration to specified customer segment.
Cost-per-click is a metric which helps in determining how much advertisers pay for their
advertisements in regards with social media. This technique is also used by Telco Company for
segmenting their customers in a strategic manner.
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REFERENCES
Books and Journals:
Hossain, M. A., Akter, S. and Yanamandram, V., 2020. Revisiting customer analytics capability
for data-driven retailing. Journal of Retailing and Consumer Services. 56. p.102187.
Jham, V., 2018. Customer satisfaction, service quality, consumer demographics and word of
mouth communication perspectives: Evidence from the retail banking. Academy of
Marketing Studies Journal. 22(3). pp.1-17.
Hung, P. D., Lien, N. T. T. and Ngoc, N. D., 2019, March. Customer segmentation using
hierarchical agglomerative clustering. In Proceedings of the 2019 2nd International
Conference on Information Science and Systems (pp. 33-37).
Heldt, R., Silveira, C. S. and Luce, F. B., 2021. Predicting customer value per product: From
RFM to RFM/P. Journal of Business Research. 127. pp.444-453.
Zong, Y. and Xing, H., 2021. Customer stratification theory and value evaluation—analysis
based on improved RFM model. Journal of Intelligent & Fuzzy Systems. 40(3). pp.4155-
4167.
Werhane, P. H., 2019. The normative/descriptive distinction in methodologies of business ethics.
In Systems Thinking and Moral Imagination (pp. 21-25). Springer, Cham.
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