Why Customers Leave You? | Fighting Churn and Building Loyalty [Part 2]
Why Customers Leave You?
We started this series with the first part, to talk about churn and the current status of this phenomena worldwide in thirst part of this series " Fighting Churn and Building Loyalty [Part 1] " .
In an intensely competitive market, customers receive multiple incentives to change their telecom provider and encounter multiple disincentives to stay.
There are many reasons to leave a provider but there might be just one single reason to stay.
Good Customer service, Loyalty and attachment to the Brand and great experience are some of the main reasons for customers to stay on
Leaving the current provider is not always a final decision. It is not always the end of the relationship, there are multiple ways a telco company can save these dissatisfied customer, even one day before they decide to leave.
We will talk about these final-steps to saving customer in the next part of this series .
Let's start by some of the main reasons a telecom customer might leave their current provider to a competitor:
Price:
Particularly in the voice and long-distance/international calls markets, telco providers offer attractive and aggressive promotions, such as relatively low monthly fees, high-volume offerings (fixed number of minutes at a reasonable fee per month), and low rates per-minute.
These price incentives can provide residential customers, in particular, with powerful incentives to change carriers.
Promotions and counter promotions are one of the causes of rotational churn, when a customer leaves a provider to another one, and after a while goes back.
This happen when company A starts a good promotion on Roaming for example, so the customer who is planning to travel will change providers during their travel duration.
Once this customer gets back, they will find an much attractive local-minutes pack from their old provider, so as a results, they will again switch providers.
Service quality:
The service here is the lack of network connection capabilities or quality in some or in most of the places where the customer requires service.
These network issues can cause customers to abandon their current provider in favor of one with broader reach or a more robust network.
It is known that improving network capacity and upgrading the equipment can present a very high investment cost to any telco company, but on the long term, these non-invested costs can make the same company lose much higher revenues due to customers escaping them and going to the competition that have a better network quality.
As a customer, I wouldn't care about the saturation or the additional constraints that my provider is having in my area. Any customer would only care about their internet speed and the voice quality they have when they make a call.
A good telco company is a company the services of which are so good, that the customer would not notice all the technological effort and investment the provider has put into improving the network.
If a customer starts noticing that data speed is slower from 7pm till midnight, this is the beginning of the end for the relationship.
Fraud:
Fraud goes both ways: when a customer tries to benefit from services using illegal or immoral methods, and when the companies advertise and sell misleading services to the customers.
The second point is where the telecom company is doing it wrong. We all can understand that market pressure, economic and financial circumstances can put any company at a moral and ethical dilemma.
But false advertisement is where the companies hurt themselves.
Imagine a company selling data packs for a certain amount of money X $, which is way below the market price. The general public would see this as an opportunity and everyone will try to jump into it.
But what this company does not say clearly in the ads, is that this data pack comes with limited speed, and it is not available during certain hours. They also don't say that if you consume more than 1GB, they will cut you off, until the next day.
As a customer, what would you think? This was definitely a scam and we would have appreciated that all of these conditions were clearly mentioned.
The first point is the most common of them all, it is when customers attempt to “game the system”.
These attempts vary in all kinds and shapes, and customers are very creative in finding ways for getting freebies and extra services.
I will not present any example of customer fraud here. But what these companies should do is analyze and understand all parts of their offers and services, and find all the loopholes and issues. This way they can minimize all possible fraud attempts and manage to only keep loyal and faithful customers on board.
Lack of carrier responsiveness:
From a personal experience, this issue is a deal breaker when it comes to customer churn! Customer service is the most common touch-point with the market and the feedback telecom companies can get from this channel is a key for improving and enhancing their products and services.
but slow or no response to customer complaints is a sure path to a customer relations disaster. No one with the right mind would bother themselves calling into customer support just to make a fake complaint. A call to customer services is a loud cry for help and not just a bored customer wanting to make small talk.
Broken promises, long hold times when the customer reports problems, and multiple complaints related to the same issue are sure to lead to customer churn.
Brand disloyalty (or loyalty to another):
Some issues that came when giant telecom groups bought a wide portfolio of other telecom companies around the world, is the re-branding challenge.
Some of these companies managed this transition smoothly and gained a lot of momentum and attracted many new opportunities.
But some of the re-branding operations were a total failure on many levels. Causing the company a major lost in customers due to nationalist feelings associated with people only wanting to support a national provider, or rumors that this re-branding might cost locals their jobs... etc
Telecom companies should always pay attention to their brand and make people feel proud to be a part of their family of customers. Just think of how Apple is doing. It's okay to copy and replicate successful stories.
Privacy concerns:
With the advancement of technology and the evolution of public opinion about privacy , now consumers have an increasing awareness that all the companies they deal with have a lot of information about them.
These companies know their consumption habits, spendings, personal financial information, health information... etc.
Breaking of privacy promises, publicized privacy problems, telemarketing, and other issues are causing many customers to consider their personal privacy as an asset and they are holding their service providers responsible for keeping privacy promises.
This usually happens when a telecom provider starts sending unsolicited sms campaigns about non-telecom products and services, like clothes and air tickets...
Customers will think that their provider has sold their information to a third party company and they are being spammed.
Lack of features:
The lack of feature can also be related to the lack of new services and products. The example of the new iPhone being sold by one provider and not the other can cause a customer to go to the company selling that device.
Customers may switch carriers for features not provided by their current carrier. This might include the inability of a particular carrier to be the “one-stop shop” for the entire customer’s Communications needs.
Not being able to transfer credit, or to have a motivational loyalty program is something customer will see available in other companies and they will always go to the provider giving its customer the best packaged deal in the market.
New technology or product introduced by competitors:
It has started with the introduction of 3G, and then 4G. High speed data has cause the late-adopters a significant loss of customer base because people will always prefer to have the best offer in the market.
Telecom companies always present new services based on technological advancements. This is why the customer started to get educated about all these different terms and acronyms like 4G,LTE VoIP..etc
New technologies such as high-speed data or bundled high-value service offerings—create significant opportunities for carriers to entice competitors’ customers to switch.
New competitors enter the market:
The mere existence of viable competitors to the incumbent carrier may cause certain disloyal customers to churn. Further, as competitors enter new markets, they often offer short- or long-term incentives to new subscribers to build market share.
The new providers to the already-saturated market will always offer discounts, and lower price tags for the new customer. These companies will get very aggressive in their communication startegy in order to attract as much customers as they can.
Billing or service disputes:
And this might be the biggest of all of them: Billing errors, incorrectly applied payments, and disputes about service disruptions can cause customers to switch carriers.
No customer would accept to pay for more than what they consumed. Telecom companies should know that customers are well aware of all the prices, and they follow and monitor their consumption levels. So any billing issues and miscalculations or any added fees will make a dissatisfied customer.
Depending on the situations, such churn may be avoidable by always doing checks and regularly following customer complaints about their bills and charges.
A proper apology and a complete refund will go a long way in case of an error.
All the points mentioned above are just some of the major issues that can cause customer churn.
So the question here is:
How to Fight and Reduce the Churn rate?
In the next part, i will talk about ways to fight and reduce the churn rate.
Your comments and feedback are always welcomed! I also love to hear any suggestions about future topic I can cover here.