Improving fixed line customer segmentation with factor analysis

Customer segmentation is vital for companies to cluster their customer base into unique groups that allow for a deeper understanding of such a base. This can provide the companies with ample opportunity to grow revenue and increase customer satisfaction. Nokia’s Advanced Consulting Services (ACS) Team is utilising Factor Analysis to build unique ‘Digital Personas’ for Internet Service Providers (ISPs) with the aims to increase revenue, reduce churn and improve customer experience among other KPIs. This paper highlights the methodology of this clustering, results from a feasibility study and shows how Factor Analysis can be used to segment customer bases and provide recommendations and business intelligence for companies in the telecommunications industry. The methods below produced ten unique digital personas based on data collected from Saudi Telecom (STC). Recommendations such as Fibre to The Home (FTTH) were presented to the client as well as dashboards for their consumption.