January 16, 2009

The Science Of Churn: When And Why Consumers Switch Service Providers

Consumer Product Strategists At Telcos And Cablecos Can Help With A Proactive Churn-Prevention Strategy

by Sally M. Cohen

with Michelle de Lussanet, Abe Garon, Dan Wilkos

Executive Summary (This is a document excerpt)

Churn — the rate at which consumers switch service providers for their home TV, phone, Internet, and bundle services — is a constant concern for product strategists at telcos and cablecos. A better understanding of when and why consumers abandon their service contracts can help providers in their quest to reduce churn and increase loyalty. Every year, a large number of customers plan to switch service providers. Their churn habits exhibit patterns of when in their contract life cycle they consider switching providers. In addition, only a handful of motivators — satisfaction with cost, quality of service, and customer care — have a major influence on churn. To prevent churn outright, product strategists at telcos and cablecos must create a preventative — rather than reactive — customer retention strategy.

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