Churn Rate in The Telecom Industry: How to Take the Bull by The Horns
Churn rate in the telecom industry is getting players in the sector into a ‘cat on hot bricks’ situation. For the uninitiated, churn rate refers to the percentage of subscribers of a service who discontinue or withdraw from the subscription over a period of time. Naturally, this results in loss of revenue and goodwill for […]
Churn rate in the telecom industry is getting players in the sector into a ‘cat on hot bricks’ situation. For the uninitiated, churn rate refers to the percentage of subscribers of a service who discontinue or withdraw from the subscription over a period of time. Naturally, this results in loss of revenue and goodwill for a business causing the players in the telecom industry to compete for customers by offering attractive services and offers to retain the customers or subscribers. Why is it important for a company to keep tabs on their churn rate, you ask? Here’s why:
By keeping a close watch on the number of subscribers sticking to and switching from the brand, companies can identify the strength of their customer service division and evaluate their overall growth prospects. Carriers losing customers does not just mean loss of future revenue but also loss of the investment they had made in acquiring these customers. Therefore, it is essential for companies to monitor their churn rate and take necessary actions to rectify it because it will prove heavier on their pockets to acquire new customers than to retain old ones.
How Can Telecom Industry Players Reduce Churn Rate?
Telecom industry players have realized the importance of monitoring churn rate, and are devising many metrics to determine and predict the probable churn ratio. This would help them to identify gaps well in advance and devise a corrective action plan before they actually lose out on customers. What are some of the common ways that telco companies can effectively reduce their churn rate? Let’s find out:
- One of the important ways through which you can minimize the churn rate in the telecom industry is to up your game in customer service. Providing clients with a hassle-free service experience and a quick mechanism to handle their queries and complaints will promote their loyalty towards the company.
- Attractive value-added services are one of the key customer churn rate reduction mechanisms that companies can use. The more the customer feels they are getting value for their money from the services provided by you, the lower are their chances of switching to a competitor brand.
- In the era of customization, people are more attracted to things that give them a ‘tailor-made’ experience. Personalized tariff plans and service recommendations for customers give them a feeling that the company is giving them specialized care. This is one of the key factors in prompting customer’s brand loyalty.
- Telecom operators must look beyond making profits and aim at the long-term well being of the company through the satisfaction of their customer. Companies must make clear cut decisions on charging the customers reasonably, and reducing the tariffs wherever possible. This will make the customers feel that the brand is not money-minded but is focused on providing optimum benefits to their customers.