Churn: What can be done before revenues are impaired?
Many organisations have optimised their processes in an effort to find new customers. But as markets reach a mature state, customer retention becomes a pivotal strategic challenge for such organisations. Churn is commonly defined as the actions whereby customers discard the services they previously subscribed to. While the reasons for churn are often known and reported, there is very little publicly available information regarding what kinds of events preceded the churn in the cable television industry.
We conducted a comprehensive research during the first quartile of the year 2017. The research offers a novel view on how to understand the spectrum of events preceding churn. The results of the research are expected to offer useful managerial guidelines for cable television executives operating in an uncertain and rapidly changing market space. The comprehensive study is available via our website but in case you simply want to know the key conclusions, a short summary is given below:
- There are several methods that can predict customer churn in eight cases out of ten.
- Service bundling reduces churn but the complexity of channel bundles causes service churn.
- Expected switching costs lower the churn rate.
- Acquiring new customers to compensate for the churn is expensive but there are things that can be done to reduce annual churn figures. After all, very few customers are churners because they move outside of the service area.
- The lack of network reliability is the single most influential factor causing dissatisfaction. However, churn is only realised when error situations and mistakes build up one after another.
- While field technicians and network engineers can prevent many help desk calls, the help desk can prevent customer departures. But it requires the right tools.
- Transparent monitoring tools and holistic network management, together with the data that intelligent network devices and DOCSIS cable modems produce, will equip operative people with the ability to reduce churn remarkably.
All these findings are described more precisely in the report. The report offers transparency for the readers to make their own conclusions but if I would have to summarise our findings in one sentence it would be:
Your help desk is a strategic asset; right tools and educated help desk can improve your churn figures.
Arttu Purmonen
Arttu Purmonen
I joined Teleste in 1997 and engineered video processing and data transmission products. I have worked as engineer, project manager, product manager and business director but understanding customer perspective has always motivated me. It brought me to be responsible for system and technical marketing where my internal driving force and former experience can party together. See my LinkedIn.
