Segmenting the Subscribers of An Indonesian 4G Service Operator Using RFM Method

Abstract

This research aims to conduct subscribers’ segmentation of an Indonesian 4G mobile technology service operator by using RFM (Recency, Frequency, Monetary) method. It divides the subscribers into some market segments that reflects the same needs and capabilities. The primary data of 999,399 subscribers are processed following the steps of RFM method. The results show that about two-third of the subscribers is in the segments reflecting a lower Monetary value, while one-third is having higher Monetary value; in which the values correspondent to the subscribers’ ARPU. However the subscribers are also having various purchasing behavior, reflected by Recency and Frequency values. The results can be utilized to assist 4G operator companies on developing advanced strategies to retain customers and increase the ARPU.