Churn management in the telecoms
There is an occurrence in all industries called customer churn – the percentage of customers a business loses every year, because of the competition. The company’s survival in the long run depends on how it takes care of the churn – the so called churn management.
But there is an industry that has a higher rate of customer churn – the communications industry. If most businesses have a churn rate between 1% and 3%, the telecoms’ churn rate is between 10% and 50%. The fact that changing telecoms isn’t a hard thing to do and the great amount of offers are some of the reasons for the higher customer churn rates.
The churn management knows different methods for decreasing the customer losses – increasing the product’s quality, better customer communication, better marketing for example. But before we take a look at those methods, let’s take a closer look at the churn management in the telecoms:
Preliminary churn management
Here belong all precautions, a company takes, in order to not let its customer churn increase. The idea is, that if the customers are offered a better price, better communication I service, better service range and better phone services as a whole, they won’t feel the need to change vendors, because they are satisfied.
One of the most popular practices of the preliminary churn management is creating loyalty programs, which encourage the customers to continue using the service in order to receive different bonuses and prizes, like club cards or a point system which give their holders discounts.
Sponsoring different events or creating clubs focused on the customers. Thus getting together people with common interests, creating useful communication.
Such proven practices lead to decrease in the customer churn rate, by creating additional services and conveniences for their customers which create higher loyalty.
Reactive churn management
These are the methods that a company uses when trying to compensate for the current customer churn. In other words – the customer churn is already happening and the company is trying to limit it.
The most common method are the so called parity campaigns – the company analyzes its competitors’ offers and creates new, better offer based on the information, in order to keep its customers.
Also, after a deep analysis a company can identify the types of clients who have a bigger chance of changing vendors. Based on this information the company can take action towards these groups of clients in order to prevent the loss.
Practically, these methods appear to be quite effective. If they are approached in a professional manner, the customer churn can decrease with above 50% – a fact we know due to our big experience from working with a Bulgarian telecom company.
No matter how high your customer churn rate is – there is a solution to the problem. But such problem should be approached carefully and by professionals in order to take care of it.
If you think you are losing too many customers to your competition or you need professionals to take care of your customer attrition – contact us, we have the needed experience and tools to do it.