Who are the VIP Customers?

By | December 12, 2011

VIP customers of the service providers have always got the attention and put first in the retention and churn related initiatives. But who are the VIP customers?

In the early days of telecommunications, where there are only primitive tools available to the sector, service providers started to search for their VIP customers in their CRM systems. CRM systems were able to provide demographic information, along with the purchasing history. By looking at this data, SPs were able to identify most spending customers. The spending behavior is then further be analyzed to identify the customer lifetime value (CLV) which looks at the spending behavior from the first day customer has activated his service.

CLV is a valuable information but not enough to identify the VIP customer segment. There is a second type of users that also needs to be taken into account. These users are called influencers. Influencer term comes from marketing context and refers to people who has strong impact on the spending behavior of other users.

If an influencer is not happy with the service and starts to talk negative about the service to his/her “followers”, the perception will fall gradually. In the worst case, if the influencer churns, the followers may follow. Because of these reasons, influencers should also be identified and treated as VIP customers.

Identification of influencers is done by a technique called link analysis. Link analysis analyzes all the entities (customers) in a system and counts their connections between them. The more connections one entity has means it is a better candidate for being an influencer.

In the telco world, link analysis started first by looking at the call patterns. An entity who is called by a diverse community is a good candidate for an influencer. “Call link analysis” is done by using CDR information and most mature service providers run it for marketing purposes.

The new trend is social media and link analysis technique should also be applied to this area as well. If a user has lots of connections in his/her Facebook, Linkedin or Twitter profile, a score could easily generated for this user. Looking at blogs to collect the comment counts could also be another data source for social media link analysis. For crawling such online resources an enterprise content management system can be utilized.

In order to do the social media link analysis effectively, the service provider should also match it’s customers with their social media fingerprint. At last, there are multiple Murat Balkan’s on social media but which one is the customer of that specific service provider?

The service provider should enrich CRM’s and self care application’s data models to include this kind of information. The entrance of this information can then be promoted by providing free service units, gifts etc.

The ultimate goal should then to reach a unified influencer score that combines the usage and social media link analysis results. The scores above a certain level then can be segmented as VIP customers along with the high CLV customers.

Category: CEM