Like all companies seeking to generate new revenue, wireless providers continually strive to expand their creditworthy universe of applicants and prospects, while shrinking or eliminating risk.
Compared with other industries, however, telecom tends to have a disproportionate number of no-hit and unscorable thin files—primarily young adults and immigrants, emerging consumers, and alternative-finance transactors. The main reason is that these individuals typically acquire cell phones well before credit cards, mortgages or other loan products, and thus, fly under the radar of traditional credit scoring.
Micro-segmentation—a paradox with a payoff
Experian has found that, despite the lack of documented credit history, these often-ignored segments contain many potentially profitable accounts. Narrowing your focus (through targeted attributes and micro-segmentation) can actually expand your universe of prospects, creating a whole new world of opportunity that enables you to:
- Grow your portfolio without increasing your risk
- Match new customers with the appropriate deposit and payment structure
- Build trust, loyalty and long-term value
Many companies also integrate market data, dealer data or other internal records to refine micro-segmentation efforts. Others enlist credit-reporting agencies to help combine traditional and alternative data sets to predict future performance. One or both methods can yield highly favorable results.
Using high-quality information from proven, reliable sources enables wireless companies to segment information in innovative and profitable ways. In fact, when providers successfully expand their creditworthy customer universe, high-quality data is usually the bright and shining star.
To learn more, read a related post about the role of data quality in effective customer acquisitions.
