Operators may know less about their pre-paid customers than their post-paid customers, but one thing they do know is that they can’t rely on their loyalty.
According to mobile financial services company Juvo, 71% of global mobile connections in 2018 were pre-paid, and pre-paid customers have an annual churn rate of 37–80%. This means that, typically, operators must replace their full pre-paid subscriber base every two years.
However, by using data analytics, operators can both reduce churn and increase the lifetime value of their pre-paid customers. Analytics can reveal how often pre-paid customers top-up their phones, how much balance they keep, and how they use their balance. For example, some customers may use most of their credit within the first few days, or save most of it until the end of their top-up cycle, whilst others use it consistently.
By identifying certain usage triggers, such as when a customer is about to run out of data, or the mid-point in their top-up cycle, operators can send them an offer, such as a bundle of data to tide them over until their next top-up, that will encourage them to spend more. This will shorten, possibly even halve, the customer’s re-charge cycle, and if the offer is good enough, will increase loyalty.
Over time, and with a good analytics package, operators will learn which offers work best for each pre-paid segment, and the optimal point in the top-up cycle to send the offer.