3 Telecom Customer Retention Strategies Fueled by Consistent Communications
Customer acquisition is important for any business, but it turns out that retention is even more so. The most successful growth companies in the world generate 80% of their value creation by unlocking new revenues from existing customers , according to McKinsey.
Customer retention in the telecom industry—especially in the ultra-competitive B2C market—is everything. Communications service providers (CSPs) are re-prioritizing spend toward strengthening loyalty. According to Analysys Mason, “CSPs increasingly want to adjust the bias of their spending on customer engagement away from acquisition and towards customer retention .”
Still, customer churn reduction for telecoms is an uphill battle. Customer loyalty toward CSPs dropped 22% after the pandemic. Just taking the U.S. market, instance, there are about 80 mobile network operators (MNOs) and mobile virtual network operators (MVNOs) and switching among them is easy for customers. Not to mention, streaming services are making it easier for customer to drop or minimize their packages with pay TV providers in exchange for quicker and easier viewing experiences.
Underpinning all of this is that telecommunications services, themselves, are indispensable. People rely on internet, cellular and cable TV service to work remotely, stay in touch with loved ones, and inform and entertain themselves. When you’ve invited friends over to watch the big game, you need your cable connection to show up, too. Outages are frustrating, inconvenient and costly. People who can’t work without internet or cellular connections lose income during the downtime, and CSPs lose revenue when dissatisfied customers churn. Almost half (45%) of smartphone user churn is due to poor network coverage.
Delivering consistent service and pricing can be challenging for telecommunications providers. Network outages are difficult to predict—and sometimes caused by bad weather conditions and power blackouts that are impossible to prevent. Bidding wars, such as those between networks and professional sports leagues, impact cable TV pricing. ESPN pays the National Football League $2.7 billion per year for Monday Night Football. When the NFL increases its renewal rates for broadcast packages, that higher cost gets passed along to cable customers.
