2015-04-17 08:48

5 steps to reduce your churn rate in the Telco industry


Even in a mature market, the voluntary churn rate in the Telco industry is still a business issue that should not be neglected. For every client lost you end up paying twice: once by losing the future revenue of the client, and twice in the cost required to invest in acquiring a new client The average cost of client acquisition for a 2-year contract is usually well above 100 EUR.

Telco companies are using every method possible to reduce churn numbers and boost their client retention rates. As a consultant in new technologies, we see a huge potential for improvement in communication, where even leading companies need to adapt faster to new trends and use the potential they have to approach their clients at the right time, with the right offer and in much more cost-effective way then using a call center.

Implementation of marketing automation and programmatic advertising can be a very effective investment for churn ratio reduction that can pay for itself in the first 4 months.

These are the 5 stages for introducing successful churn reduction, thanks to marketing automation projects, for the largest telco providers.

Stage 1. Integrated Data Management

The first step for effective use of cross-channel communication is integrating the fragmented data about users from such sources as: CRM, web analytics, and historical campaign data. Matching cookies with real users data might be accelerated thanks to certain tactics. For instance: by promoting the use of electronic invoices, contests where the results can only be checked by logging in online, special offers in the client’s interface etc. Usually, it is almost impossible to match all users with their cookie data, but thanks to the above mentioned tactics, we are able to match more than 60% of customer contracts in the first 3 months.

Stage 2. Modelling anti-churn communication patterns for marketing automation

Multi-channel, anti-churn communication scenarios should be adapted to users’ behaviors. Media and communication should be chosen according to the stage at which the user is in the moment of the decision making process.

Technology allows the use of multiple channels for automated, real-time and personalized communication that in such cases will be much more effective than brand building ATL campaigns.

Stage 3. Personalized & Real-Time contact with clients close to termination

Communication should be implemented in two concurrent ways: outbound – contacting the client, and inbound – responding to a client’s call. For outbound communication we usually recommend an anti-churn display campaign for a defined cookie pool, and separate personalized RTB campaigns for users who haven’t yet received a tailored offer and those who have already received a tailored offer. In the latter option, the creative presents a unique value for the client such as preferred devices, packages including free minutes, family packages, internet transfer, etc., based on the user’s transaction data mixed with their behavioral profile. Most valuable clients are approached through a call-center with a personalized offer based not only on transaction data but also on the areas of the client’s interests as revealed through his or her online behavior.

To name a few of the inbound communication tactics, we usually suggest: personalized offers on the website, in call-center and at point of sale; internal campaigns with a personalized offer; automated email/SMS campaigns triggered by a user’s behavior; dynamically created www content and contact forms.

Stage 4. Tracking performance and optimization

Taking real-time learning and implementing automated improvements would be impossible without web analytics, which is an intrinsic part of the solution. External web analytics systems do not provide effective data security so it is very risky to connect them with CRM. In addition, they are not integrated with a marketing automation module and that makes automated improvements almost impossible. Integrated web analytics is also much faster and can pass triggers to the marketing automation module in real-time, with no delay.

Stage 5. Re-investment of savings

Money saved in reducing acquisition costs amounts to millions of Euros yearly. Why not reinvest a fraction of these savings in effective acquisition of new clients that are close to the termination of their contracts with a competitive provider. Big data analytics provides the ability to find similarities in the cookies of users who are approaching contract termination, and ad serving technology makes it possible to target look-a-like cookies that are from the clients of competitors. Such campaigns resulted in cost effective acquisition of validated leads, with CTR’s several times higher and CPA’s several times lower than regular display campaigns. Last but not least they were bringing in new clients so, contrary to retargeting they were actually contributing to long term business growth.

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