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Customer Segmentation and Analysis of a Mobile
Telecommunication Company of Pakistan using
Two Phase Clustering algorithm
Salar Masood, Moaz Ali, Faryal Arshad, Ali Mustafa Qamar, Aatif Kamal
Department of Computing
School of Electrical Engineering and Computer Science (SEECS)
National University of Sciences and Technology (NUST)
Islamabad, Pakistan
{09bitsmasood, 09bitmoaza, 09bitfarshad, mustafa.qamar, aatif.kamal}@seecs.edu.pk
Abstract—Pakistan hosts a competitive and fluid telecommunication market and for a company to sustain, create customer value and increase economic efficiency, it needs to better understand its customers. The purpose of clustering or customer segmentation is to deliver actionable results for marketing, product development and business planning. In this paper, we focus on customer segmentation using clustering algorithms on real data of a telecommunication company in Pakistan. After choosing appropriate attributes for clustering, we used the twostep clustering algorithm in order to create different customer segments. Moreover, the insights obtained from each segment were analyzed before suggesting marketing strategies for upselling and better targeted campaigns.
Keywords-Customer segmentation, Two-Step clustering algorithm, Business Intelligence, Clustering
I. I NTRODUCTION
Pakistan hosts the world’s largest and the most experienced telecommunication companies. The number of mobile subscribers has reached around 123 million, with more than 90% of the country having cellular services and with a tele-density of over 62% as of January 2013. In such an environment, in order to increase profits and create a loyal customer base, a company first needs to better understand its customers. For this purpose, different clustering algorithms are used.
Segmentation is applied in order to classify the customers into different groups according to one or more attributes. The customers within the same group have greater
Telecommunication Company of Pakistan using
Two Phase Clustering algorithm
Salar Masood, Moaz Ali, Faryal Arshad, Ali Mustafa Qamar, Aatif Kamal
Department of Computing
School of Electrical Engineering and Computer Science (SEECS)
National University of Sciences and Technology (NUST)
Islamabad, Pakistan
{09bitsmasood, 09bitmoaza, 09bitfarshad, mustafa.qamar, aatif.kamal}@seecs.edu.pk
Abstract—Pakistan hosts a competitive and fluid telecommunication market and for a company to sustain, create customer value and increase economic efficiency, it needs to better understand its customers. The purpose of clustering or customer segmentation is to deliver actionable results for marketing, product development and business planning. In this paper, we focus on customer segmentation using clustering algorithms on real data of a telecommunication company in Pakistan. After choosing appropriate attributes for clustering, we used the twostep clustering algorithm in order to create different customer segments. Moreover, the insights obtained from each segment were analyzed before suggesting marketing strategies for upselling and better targeted campaigns.
Keywords-Customer segmentation, Two-Step clustering algorithm, Business Intelligence, Clustering
I. I NTRODUCTION
Pakistan hosts the world’s largest and the most experienced telecommunication companies. The number of mobile subscribers has reached around 123 million, with more than 90% of the country having cellular services and with a tele-density of over 62% as of January 2013. In such an environment, in order to increase profits and create a loyal customer base, a company first needs to better understand its customers. For this purpose, different clustering algorithms are used.
Segmentation is applied in order to classify the customers into different groups according to one or more attributes. The customers within the same group have greater