Measure of CLV toward market segmentation approach in the telecommunication sector (Vietnam)

Abstract

This study is based on data used by a telecommunications industry over a period of 6 months, beginning July 1, 2018, until December 31, 2018. The approached model of customer lifetime value (CLV) was concerned on the sample size of 245,355 records made by cell phones of active prepaid subscribers. The aim of this article is to estimate CLV through survival function with adjusted variables enclosed, for example, marketing cost. To do this, a statistical model was used to predict the individual CLV and confirmed a different finding to some previous study, in which this new finding brings an important message that the telecom providers should take care of customer earlier before too late because after the 10th of tenure, the subscribers can churn the telecom operator’s service. The result of CLV is well supported to segment market. It will also benefit the telecom providers to maintain their market competitiveness.