This blog post was co-written with Claire Penicaud.

In the early days of mobile money, operators used to look at the number of registered accounts as their key performance indicator. With the industry maturing, focus has shifted toward the number of active mobile money accounts. However, there are many different ways of defining what an active account is and whilst there has been a standardisation of definitions over the past couple of years, we still get questions from operators on which definition they should use.

In this article, I’ll discuss the benefits of tracking 30-day and 90-day activity rates on an ongoing basis, and shed light on what other criteria operators could consider to gain a better understanding of the customer activity levels.

Daily monitoring of customer activity – Using active 30-day rate and 90-day rate definitions

Today, most operators track mobile money accounts that have been used to perform at least one financial transaction within the last 30 or 90 days. These indicators are good for mobile money managers to monitor ongoing customer activity, and they can be easily tracked on their databases. However, we suggest that mobile money managers consider both rates when assessing customer activity, as each provides insights for different aspects of the service.

The 30-day rate is best for understanding how people use mobile money: it’s easy to see the average number of transactions per user per month and it’s easier to interpret than the average number of transactions per user over a 90-day period. It can also be used to compare the number of active customers to the number of active agents, which is usually monitored on a 30-day basis.

On the other hand, the 90-day rateprovides a more comprehensive picture ofthe total number of people using mobile money. Indeed, the 30-day period may not be right for all segments, and the duration can be too short to give full visibility on the number of regular users.

Finally, because these two definitions have become standards in this industry, using the active 30-day and active 90-day rate definitions allows operators to benchmark their customer activity levels to their peers, both globally and regionally.

Aligning with strategic objectives – The value of customised activity definitions

Beyond daily monitoring, tracking customer activity should help mobile money managers understand to what extent they are achieving the strategic objectives of the organisation. For that reason, it is important to think about the definition of an “active account” in the light of the overall strategy of the operation. There are different elements of the definition of an active account that operators can play with:

• The type of transaction – For example, if the strategic objective is to position mobile money as a remittance service, then it’s probably worth tracking the number of accounts that have been used to send money, rather than to track accounts that have been used to perform any kind of transactions such as airtime top ups.

• Non transactional elements – If the operator is looking to drive savings, then monitoring customer account balances would be helpful.

• Time window – If part of the strategic objectives is to increase transactions in the more “underserved” communities where cash flows are seasonal or generally irregular, mobile operators may want to use a different time period that captures activity of this segment – for example, looking at accounts that have been used to perform one transaction in the last 6 months. Otherwise, they could be missing out on capturing some fairly regular usage data which isn’t happening on a monthly basis, or even quarterly basis.

For example, we discovered from one deployment that the 30-day active customer rate generated blind spots on usage patterns for rural users (i.e. those with less regular cash-flow patterns).  After initial analysis on the 30-day assumption, the data for rural users was instead assessed for a 90-day period– and it was uncovered that while rural users weren’t using the service on a 30-day basis (hence being marked as “lapsed” user), in reality they had been “regular” users over a longer time period (averaging one transaction every 45-60 days). Perhaps in these segments even a 180-day activity rate can be monitored.

Monitoring active rates only is not enough to significantly change the operation

Finally, it is important to understand how customers are using the service, and what barriers they are facing along the customer journey from awareness, to registration, and then to regular usage. Monitoring the number of active accounts does not give that level of insight on customer activity, and a more detailed analysis of transaction data over a longer period of time (6-12 months) can reveal key aspects of the customer journey. By knowing how the customer adopts the service, and at what point most customers drop off, operators could apply appropriate tactics to ensure as many registered customers as possible become active customers ( You can read more about customer segmentation and the customer journey here.)

Overall, mobile money operators should look at both 30-day and 90-day customer activity rates to monitor their daily operation, keeping in mind the differences in what they inform. In addition to this and for a more broad and insightful understanding of the operation, using customised definitions that are closely tied to the operator’s strategic objectives is also useful. Finally, a more complete analysis of the transactional database will help mobile money managers assess their customer base and get ideas for boosting usage in particular customer segments along the journey to regular mobile money usage.

How does your mobile money deployment monitor customer activity rates? Let us know in the comments below or by emailing [email protected]