White paper: Breaking the churn cycle–reducing churn in a demanding customer environment

Alvin Francis, Director, Wireless Business Unit, EXFO

Businesses in today’s highly competitive global market must overcome countless challenges from the relentless need for innovation and ever-increasing customer demands to mitigating risks caused by economic and natural disasters. Too often in this environment, customer churn is treated like an acceptable, unavoidable element of doing business.

As the maxim goes: it is vastly more expensive to acquire customers than retain them; research varies on just how much more, but commonly finds it four, five or even 10 times as costly.

This acceptance of churn is rarely more pronounced than in in telecommunication service—even though its costs are familiar and well documented. This endless-seeming cycle of customer churn is caused by numerous factors, some unavoidable, but more can be controlled than network operators believe.

While unexpected disasters can play a part in downtime or incidents that spark customer outrage, it generally plays a small part. For example, a 2012 study of incidents experienced by European network operators conducted by The European Union Agency for Network and Information Security (ENISA) found that the bulk of incident reports (75 per cent) were made due to “system failures” with hardware failures and software bugs being the second and most common cause, respectively.1

With competition in the communications market reaching all-time highs, network operators must face this churn from dissatisfied customers on one hand even while going up against deep discounting, service innovation and emerging technologies being offered by competitors. They must bring their A game.

This whitepaper looks at the dangers of customer churn, how customer experience effects churn and how to reduce it to keep and win new business, especially in the highly-competitive telecommunication market.