Churn is a widespread problem across almost every industry. However, it is especially relevant to the telecommunications market, as many believe it to have reached saturation point. Competition is at an all-time high and many telcos are recognizing the need to improve customer experience and service in order to lower customer churn rates and compete effectively. To do this, it is essential to understand the reasons for churn in telecoms.
TechSee conducted a comprehensive Telecom Customer Churn survey to learn more about the reasons for customer churn. The research covers telcos’ level of customer service, the points at which consumers are most likely to churn, gauging consumer sentiment about ways in which companies can improve customer loyalty.
The prominence of churn in telecoms
Survey data shows that 39% of Americans who canceled a contract with a company in the past 24 months cited customer service as the primary reason, and 52% of them reported that the contract they canceled was for phone, internet, TV or cable services.
Primary reasons for churn in telecoms
It emerged that churn in the telecom industry is most often due to high customer effort. Customers canceled their contracts for the following reasons:
- companies wasted their time (37% waited too long to have their issue resolved)
- they had to call more than once (51%)
- untrained or incompetent agents (37% thought the reps were rude or had a negative approach)
- inferior self-service options (14%).
How to reduce churn in the telecom industry
The survey into the reasons for churn in telecoms brought the current customer retention practices of many telcos into sharp focus.
While 44% of customers actively searched for an alternative provider, the remainder churned passively. This was either because they were disengaged with the telco’s services or because they heard about or were offered a better deal from a competitor.
Unfortunately, it seems that reactive retention strategies are ineffective. Despite the fact that 61% of telcos tried to retain their customers after they canceled their contracts – usually by offering a discount or an apology – their efforts were largely unsuccessful.
Instead, proactive efforts are key. Among those who churned following a negative service experience, 40% would have changed their mind if they had been offered a better service plan, and 33% would have stayed if they had believed that the telco’s service would improve in the future.
It seems that being proactive is the key to effective churn management in telecom.
Do disappointed customers spread the word?
The results of the survey reveal that:
- 79% of customers admitted sharing their disappointment about the telco’s level of service with others
- 73% discussed the company negatively with friends, family or colleagues
- 22% shared it on their social media channels
- 12% posted on the company’s official social media channel or website
- 10% shared it in an online forum
- 3% discussed it with the media.
Clearly, every lost customer has the potential to cause the churn of many others, further highlighting the importance of ensuring that each and every customer is encouraged to stay with their current telecom provider.
2019 Customer Churn in Telecoms Survey Results
For full access to the 2019 Customer Churn in Telecoms Survey Results, which includes deep dives into the data and eye-opening quotes directly from customers, download the Telecom Customer Churn survey report now.