Business profitability relies heavily on customer loyalty – something that can be hard to obtain in the telecom industry. Due to an increasingly competitive market and the ability for customers to switch to a new provider within minutes, customer churn has become the most prevalent problem within the telecommunications industry.
So, how do you reduce customer churn? In this article, we’re going to discuss everything you need to know about churn rates and how to reduce yours.
What is the churn rate?
Put simply, churn rate, also known as customer churn or the rate of attrition, is the rate that customers cease their professional relationship with you and withdraw their custom. This can happen in any business, but it is most commonly seen in and associated with the telecommunications industry, largely because it’s a subscription-based sector.
In terms of telecoms, the churn rate would refer to the percentage of customers who close their contract or subscription with your company in any given time period. A high churn rate means you aren’t able to retain customers; therefore, loyalty to your service is low.
A high churn rate is a good indicator that something isn’t right with your service and customers are able to get better elsewhere – meaning there is a fundamental flaw in the way your business operates.
Why is churn rate so important in telecommunications?
If you continuously find you have a high customer churn rate, you’ll quickly find that your business isn’t sustainable. Getting new customers to sign up to your service is one thing, but it’s not enough to keep your business afloat for long. To survive, your business needs loyal customers, and that means continuously looking at ways you can improve your service to keep your customers happy. If you don’t, your business will become unviable.
What causes churn in telecoms?
There are numerous reasons why customer chun happens, specifically within the telecoms industry, but three of the most common reasons include:
Poor service experience
The first and most obvious reason why your customers might choose to leave your company and move elsewhere is because the service you provide doesn’t meet their expectations. For example, if your network is plagued by poor service, a lot of downtime, or unreliability, it’s reasonable that customers may look elsewhere.
If poor service experience is the reason for your customer churn, you’ll likely know about it in good time. An increased number of calls to your customer service team or an influx of negative feedback or reviews are both strong indicators that something about the actual service you offer isn’t quite right. Of course, issues will always be present, but if you notice a pattern in the same sort of complaint, or a general uptick in complaints, it’s likely there’s a wider issue that needs to be addressed.
Poor customer service or experience
After a negative service experience, poor customer service is the next big reason why customers might look elsewhere. As mentioned, issues crop up and that’s to be expected, but it’s how you deal with them that matters the most. Customers want an accessible, efficient, and polite customer service experience. If they feel like you’re difficult to get hold of, issues take hours, days, or even weeks to resolve, or like their query isn’t handled in a respectful manner, they will inevitably withdraw their contract.
We’re seeing an increasing trend in the importance of customer personalisation; your customers want to feel like you’re dedicated to them and like their custom is important to you, no matter how big of a company you are. If they feel like they’re disposable to you based on a negative experience with your customer service team, they’ll likely leave.
Easy to switch providers
An uphill battle that nearly all telecom companies are facing is the fact that it’s easier than ever to switch to a new telecom provider. It can take just minutes to set up a new contract or subscription elsewhere, meaning you can lose customers just as quickly as you can gain them. Customers are spoilt for choice on who gets their custom, so it’s more important than ever that you make every effort to retain your existing customer base. If you don’t, you could lose it in the blink of an eye.
How to reduce churn rate in telecoms
Knowing what causes customer churn is intrinsic in figuring out how to reduce it. Luckily, it doesn’t take too much effort on your part to show your customers that you’re different from other providers and that you genuinely care about providing the best possible service and experience possible. Here are four of the fastest and most reliable ways for you to reduce your churn rate:
Improve customer service
If customer service is where your business appears to be falling down, make sure you spend time understanding exactly where the sticking point is and developing a plan to tackle it. For example, if the issue customers have with your customer service is that it’s difficult to find contact information and speak to an agent, you will want to look at making your customer team more accessible by better promoting their contact information.
Create a memorable customer experience
As mentioned previously, customers want to feel like they’re special and valued, so taking the time to create an experience that they’ll remember is key. This means avoiding generic scripted responses and taking a customer-first approach that goes the extra mile, such as providing a follow-up call a few days later to ensure the customer hasn’t had any other issues, or advocating for gestures of goodwill.
Invest in new technologies
New technology goes hand-in-hand with providing a memorable and satisfactory customer experience. A prime example of this is with co-browse technology, for example. If a common complaint is that agent assisted journeys can be long-winded due to communication issues, co-browse technology can tackle this issue head on.
With the likes of co-browsing technology, your customer service representatives can see the issue the customer is having and guide them through a resolution in real-time, even taking control of certain aspects of the process to make it faster.
Something like this can half the time it takes to resolve an issue, provide the customer with real-time learning and expertise, and create a memorable experience that they may not get elsewhere.
Make Better use of data
Finally, make use of data. Look at your analytics to determine common patterns to identify problems quickly. The moment you notice an uptick in something specific, set about resolving it before it impacts more customers and results in higher churn.
Data can provide the most accurate insight as to where the issues within your business lay and can highlight variables that you might not have even thought of.
Looking at data and using it to draw actionable conclusions is key to retaining customers, so make sure you invest in analytics and regularly identify patterns early on – it could be the difference between losing a handful of customers, or hundreds.
Churn-reducing technology at Vizolution
If customer service is the main cause for your churn rate being high, speak to us today to find out about our range of customer support solutions, such as co-browsing or screen sharing technology, which could help you retain your customers.
Alternatively, find out more about how we helped O2 improve their customer retention rate and reduce their churn.