Why is
preventing churn becoming increasingly important?
1. Keeping valuable
subscribers.
- A 5% improvement in subscriber retention can result in a 75% increase in
profitability, if you target the right (valuable) subscribers.
- It costs a great deal more money to win new subscribers than it does to
retain existing ones. The average cost to acquire a new subscriber is US$480 -
this includes dealer incentives, advertising, marketing and other sales-related
operating costs. However, the average cost to retain a subscriber is only around
US$60.
2. Market saturation of mobile phone subscribers is making it
more and more difficult to acquire new subscribers. At around 70 % in Europe,
market saturation reduces the effectiveness of mass media marketing and makes it
more difficult to identify valuable subscribers.
3. Mobile number
portability - that allows customers to keep the same number when changing to a
new service provider - is expected to substantially increase churn
rates.
According to a study by the Management Network Group, 27% of current
wireless subscribers will churn as soon as they receive a better offer, and more
than 50% of wireless subscribers who had experienced customer service problems
in the past year will switch carriers.
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Magyarul