- Mobile telecoms retain the highest average customer churn at 38.6%
- The industries experiencing the highest levels of growth in customer defection rates since 2005 are supermarkets and general insurance providers, with both seeing a 7.6% point increase in churn rates. Both of these, however, look small compared to the 15.3% increase seen in mobile churn.
- The three key reasons why people change supplier are consistent across Europe and the US. These are, not being recognised as a valuable customer (all countries average: 55%); unhelpful staff (47%); and ineffective call centres (42%).
“The world is becoming generally more mobile and less loyal,” says Pitney Bowes Group 1 Software VP, International Marketing, Andrew Greenyer. “Yet despite all the effort and investment going into customer retention and loyalty, the effective strategies implemented by well known success story companies are not yet the norm.Commenting specifically on mobile churn, Greenyer says:
“Mobile Telecoms remains a very fluid area. Here, strong brands are evidently having an effect, with the issue of content provision likely to be a key factor in future churn (or indeed inertia) patterns. 3G provision has initially disappointed consumers, leading to massive churn. Nevertheless, the sector is so volatile that this situation may easily reverse after its initial customer relationship difficulties.Source: Mobile Marketing Magazine
“The US experiences far lower rates of churn, but this probably reflects the closer link in North America between cellphone carrier and handset. In Europe, the two are independent of one another, allowing the SIM card to be fairly portable between models. However, this also helps network operators use attractive handset ranges to persuade customers to switch. Also, number portability is relatively new in the US. The UK got portability in 1998, Spain and Sweden in 2000, and Italy in 2001. Americans didn't get it until the end of 2003.
“Finally, there are the factors of overall mobile penetration and pre-paid penetration. Mobile penetration in Europe now exceeds 100%, with 666 million connections. The US has 70% cellphone penetration compared with over 80% in France, more than 100% or more in Germany, Spain and the UK, and over 120% in mobile-mad Italy. 25% of US cellphone users switch plans each year. However, there will only be 40 million pre-paid customers in the US in 2009 (17% of forecast total market). This compares with over 50% pre-paid penetration in Europe, and pre-paid churn is on average three times higher than post-paid.”