Customer retention is 5- 10 times cheaper than customer acquisition.
It is natural then for Telco Operators to concentrate their efforts to avoid churn. Churn Prevention is one of the final goals of Customer Service and Customer Experience Management.
If Service Level, NPS, CSAT are operational KPIs to measure Customer Service and Customer Experience performance, the ultimate measure of the success is the Churn Rate and ARPU.
If we speak about Retention, we are speaking about 3 main areas:
This article is focusing on Proactive Retention showing some good and not so good practices
Proactive Retention by best customer experience
Proactive retention starts with offering customers the best experience on using their services that they never think to churn, even they become promoters of your brand.
How to assure the best Customer Experience will be the subject of a special article
For now we should focus on Customer Churn: one of the main reason of churn is customer dissatisfaction, the bad experience they had once contacting the operator over one of the touch-point (customer service, shops, digital touchpoints)
To reduce the churn the customer experience management focus should be to avoid customer dissatisfaction
First of all the operator has to detect the dissatisfied customers: for this the best practice 👍is to roll-out a platform which will support mass collection of customer satisfaction feedbacks after (almost) each of the customer contacts.
Second best practice👍 is to Close loop feedback for any customer signalizing dissatisfaction in any of the after-transactional Customer Feedback Survey – contact back the customer and do everything possible to resolve the dissatisfaction reason.
I could measure repeated times the churn avoidance effect after close loop campaigns.
The next maturity level is to detect dissatisfaction of customers with the services provided by rolling-out a network customer experience solution which will detect sessions for several services (calls, messaging, browsing, applications) with technical parameter known to be unacceptable for customers. Best Practice 👍:Create a dissatisfaction risk factor for every customer – address personally the customers with high dissatisfaction risk
Enroll customers in Loyalty Programs
Loyalty Programs are a known tool to create a barrier for churn, to motivate customers to continue to use the services of one operator
Contract Renewal Campaigns
There are few countries where the contract will be prolonged automatically. For these countries a churn risk model is critical to assure the efficacity of the special renewal offers – the operator may not want to contact “dormant” customers who will accept the contract prolongation without any actions.
For most of the countries, after the contract is finished, customers will continue to stay on their postpaid conditions but not bind to any contract duration: they may cancel anytime. The same churn risk model is important here to assure the efficacity of a contract renewal campaign.
Best Practice 👍: Based on a churn risk model address the customers at the end of their contract (inbound, outbound, notifications) with a special contract renewal offer. I could experience success rates of over 80% for proper managed contract renewal campaigns
Proactive Retention of Prepaid Customers
Best Practices👍: based on a special Churn Risk model, contact (notification) the high churn risk customers with special promotion motivating to recharge their balance
Best Practices👍: Based on a customer value analysis, contact in special migration campaign customers which would gain from a migration to a postpaid contract and motivate their migration by special offers