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July 15, 11:00 EST / 16:00 BST
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.
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.
It emerged that churn in the telecom industry is most often due to high customer effort. Customers canceled their contracts for the following reasons:
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.
The results of the survey reveal that:
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.
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.