According to a recent Forrester report (via Center for Media Research). mobile phone subscriber churn amongst US mobile subscribers is 24% a year. That’s right – they loose one out of 4 customers annually.
The main reasons why people switch are price and service – with handset selection, customer service, data services and original content as secondary reasons.
The study suggests ways providers can differentiate themselves to maintain their base and attract switchers, including giving customers the ability to store pictures, IM, and other stuff on the network, be an objective advisor to customers, delivery of audio and video, up-sell the biggest spenders to the hottest handsets, and multiservice bundles.
It is surprising and possibly blinding to see that customer service comes out as a secondary reason for switching. While it may be a secondary reason that people gave in the survey for “leaving” the company, it may also be the one area where cell phone providers could differentiate themselves and “keep” those same customers longer. If instead of spending tons of money on aggressive new customer acquisition campaigns, they would spend more money on proactive customer service calls, they might find their churn rate going down dramatically. Would you switch as quickly if every so often a friendly service rep would leave you a message to explain a new service feature, or to tell you that you might benefit from being on a newer or different plan, or to let you know that there are existing features which you are not using yet that might benefit you and perhaps offer some help in getting you acquainted with its usage, or if they simply were to send you a text message wishing you happy birthday, or a message welcoming you to a new town with some simple factoid about the place when you travel, and the ability to get more information about the place if you want to.
If they could make their customers feel good about being their customers, churn would go down more so than if they were to try to “lock them up” into multi-service contracts or if they were to just continue adding bells and whistles to the service.