Keeping Your Customers in a Competitive Market

Customer retention is the key business issue for telcos at the end of the 1990s. Effective churn management allows a telco to stay ahead of its competitors, increases profitability and improves investor confidence. There are no simple solutions; telcos must adopt aggressive strategies which cut across the customer lifecycle and underpin all business processes.

This new manual from Chorleywood Consulting is a practical guide to telcos aiming to lay down winning strategies for promoting customer retention. It looks in detail at the ways in which telcos have attempted to retain their customers and at how successful they have been. For example, Cable & Wireless Inc has achieved a churn rate of 2% per annum amongst its business customers almost entirely by concentrating on superior customer service.

In the cellular sector, churn rates in the region of 30% are not unusual, but a few telcos have managed to achieve rates of around 15%. Such differences are examined and practical advice and guidance given to telcos on how they can achieve similar success in driving down their churn rates.

Churn management products are profiled and a model shows the typical cost reductions available from a churn management programme.

No single measure will effectively combat churn. An approach is required which focuses effort in each business area on telcos' most valuable customers, maximising return on investment.

Key strategies include:

• incentives and tariff bundles which target the most profitable customers
• loyalty schemes which are appropriate to the value of the business saved
• acquisition strategies which attract the right type of customer, reducing fraud and bad debt
• proactive customer service
• a commitment to quality in all aspects of the business.

Customer retention is a bottom line issue. A typical return on investment for a loyalty programme is in excess of 200%. The Manual of Customer Retention and Churn Management, comprising over 90 pages is an essential tool for telcos wishing to drive down their churn rates and develop an effective customer retention programme to meet the demands of competition.