As the mobile-services industry starts to mature, executives must find new ways to sustain growth—especially by generating value from existing customers. Customer life-cycle management, though a likely and proven strategy, presents a vexing challenge to prepaid mobile operators: the nature of their transactions does not permit the exchange of vital marketing details, such as age, gender, and address. Operators therefore resort to blanket promotions that risk destroying value by needlessly cutting prices or offering free services. But companies can find alternate ways to overcome the data shortfall, as our experience shows. One solution is for marketers to look more closely at their billing systems, which conceal a wealth of information; to create segments, often as small as 100,000 subscribers; and to plan tailored promotions for each group.

The exhibit below illustrates one prepaid mobile operator’s strategy to reduce churn rates by segmenting subscribers through their usage patterns. Tracking the number of days before a customer is “lost” helped the company to introduce promotions most likely to increase usage and retention while minimizing revenue lost to scattershot offers and unnecessary discounts.

To learn more, read “Getting more from prepaid mobile services” (February 2008).