Skip to main content
Jan 18 2017

Study shows cost & billing issues drive 40% of consumers to churn

Twitter: @sanlowe

Here are 3 ways to improve retention

The Nokia Global Acquisition and Retention Study (2016) examined key drivers of customer retention, surveying 20,000 mobile phone users primarily located in mature markets. The survey revealed that 40% of consumers leave a service provider because of cost and billing issues (see Figure 1). In this blog, I’ll discuss this finding in more detail and address three opportunities that exist for service providers to reduce churn and enhance the customer experience with better plans, targeted offers and promotions.

Figure_1

Have the right service plan and rate structure

Meet Mary. Mary is unhappy with her current service provider. She doesn’t feel that any of the plans offered address her needs and is looking to switch to another provider. While 40% of consumers leave a provider because of cost and billing, the overarching reason isn’t as much cost as it is having the right service plan.  As shown in Figure 2, 18% of consumers indicated that the availability of the “right” calling plans and rate structure is the key concern. Service providers are being held back by outdated, inflexible charging systems that limit their ability roll out new service offers in a timely and competitive fashion. Building relevant plans represents an opportunity for providers to improve time to market, enhance customer engagement and reduce churn.

Figure_2

Present options when allowance limits are reached

Let’s look at a simple use case. Mary has consumed her data allowance. Instead of receiving various options to pick from, her only choice is to now pay a fee for each MB consumed. This is not uncommon, but may leave Mary unhappy once she checks her current usage or gets her bill. Of consumers surveyed, 24% cannot pick the option they want when reaching their allowance. Here, providers have an opportunity to improve customer interaction and present choices that customers want.

Service providers could even leverage usage insights to present consumers with their preferred option. How often does Mary reach her data allowance before the end of the billing period? Would she be better off with another plan the provider offers? Applying insights such as these help ensure consumers receive the options they want.

Offer additional service options that are relevant

Mary is a music junkie. She uses much of her data allowance to stream the latest hits.  Given her usage habits, the provider has an opportunity to offer Mary an upgrade package that includes free music streaming. But Mary never receives the offer.

Our survey revealed that 37% of consumers would be open to receiving offers from their service provider, but do not receive any. By leveraging usage insights from analytics, providers can place the right offer in front of the right consumer through the right channel at the right time.

There are numerous opportunities for service providers to reduce churn and enhance the customer experience with better plans, relevant offers and promotions.  In my next blog, I’ll share findings of the survey as they relate to customer retention, value added services and targeted offers.

Visit our website, to find out how you can benefit from Nokia’s policy and charging portfolio.

Share your thoughts on this topic by replying below – or join the Twitter discussion with @nokianetworks using #NokiaStudy #CSPCX #BSS

About Sandra Lowenstein

Sandra is a product marketing manager for Nokia’s policy and charging portfolio which is used by some of the largest CSPs to generate revenue from innovative service offers and enable new business models. With broad product marketing expertise, she loves the challenge of promoting the value of technology in solving customer problems.