A loyal long-term customer is considered a key asset by companies in most industries. It’s conventional wisdom that it costs more to recruit a new customer than to keep an existing one. Consequently, existing customers should be treated better than new customers.
But in the mobile industry we know better than that, right? Here are six commonly used operator practices which encourage existing customers to leave rather than to stay:
- Increase the price when the contract period is over
- Let the customer pay the handset – again
- Include free content – and take it away
- Make sure the customer loses all luggage
- Launch great propositions – for new customers only
- Don’t call – until it’s time to sell
Follow this anti-guide to reach that 100% churn rate target.
1. Increase the price when the contract period is over
Even if you locked your customer in for 24 months – while offering him or her no flexibility – don’t take any chance: If you increase the price at exactly the point in time when the customer can leave then he or she must get it and leave, right?
Operator examples? We could name a few.
2. Let the customer pay the handset – again
This has proven effective as well: Force the customer to continue to pay a bloated fee every month – even though he/she already has compensated you fully for the handset during the 24 months binding contract. Why charge 19 when you can charge 49 and scare the customer away?
Operator examples? We could name many.
3. Include free content – and take it away
First you give the customer a free content service – long enough to develop an addiction (say 6 months) – and then you take it away for the remaining 18 months of the mobile binding period.
Operator examples? We could name a few.
4. Make sure the customer loses all luggage
To discourage customers to stay with you, make sure that you confiscate any unused data at the end of every month. Allowing customers to save unused data in a savings account would only mean that they might stay with you.
To really make them feel unappreciated, make sure to confiscate also unused top-up data at the end of every calendar month – even if it was bought the same day. If the customer was so naive to think that what he paid for was for him to keep, you’d better correct that misconception since the risk is otherwise that he stays.
Operator examples? We could name many.
5. Launch great propositions – for new customers only
A classic. To annoy your existing customers, make your new fantastic proposition exclusive to new customers. Point out that existing customers can’t join since they are “in contract”. It leaves them with that feeling of being trapped.
Operator examples? We could name many.
6. Don’t call – until it’s time to sell
If all of the above haven’t convinced your customer to churn, then this trick should do it: For 21 months of so, never call a customer on a binding plan. Don’t ask them if they are happy with their service, don’t advise them to use your services differently, never excuse yourself for the network issues they experienced or the billing problem you created for them.
But three months or so ahead of their contract expiry, assign your pushiest sales agents to the customer, incentivising them to call the customer again, again and again. All calls should start with “we’re just calling to hear if you’re happy with our service” after which the sales agent delivers sales pitch after sales pitch. Don’t think that the work is done just because the customer hangs up; call again.
Operator examples? We could name a few.
Summary
Those were six great ways to make sure your customer churns. But the industry performance is still poor: No operators are so far in 2015 close to the 100% two-year churn rate required to make sure all customers churn once their 24 month contracts are over.
The six hints above can help you to increase churn to the targeted 100% level. Let’s fill the chart with red!
Warning: This was an anti-guide. We think operators should work hard to keep existing customers happy and loyal – but we note that operators often do the opposite and follow the anti-guide – thereby ending up wasting millions on customer retention to compensate.
It’s time to stop taking advice from the writers of the anti-guide
Our guide is Nonstop Retention. Read about it here: www.nonstopretention.com