Developing retention strategies based on customer profitability in telecommunications: An empirical study

Abstract

Research evidence shows that telecommunications companies fail to make their CRM efforts pay off. This is probably due to a lack of capability to develop effective customer strategies based on customer profitability. Reducing the churn rate in the industry is not enough. Companies must be able to plan and execute profitable campaigns, taking into account both customer risk and customer profitability. Controlling and evaluating the campaign’s results is a crucial factor. In this paper, this deficiency is addressed by proposing a framework for building effective customer strategies based on customer behaviour, customer profitability and customer risk. Empirical results are analysed and discussed.