By: Jesse Cryderman
"Churn" is a dirty word in telecom. Unless it’s declining, no one likes to talk about it publicly, and yet the word is used quite often behind closed doors. That’s because churn indicates a relationship gone bad—it’s proof of a breakup, and no one wants to talk about how many break-ups they’ve weathered.
Churn, short-hand for churn rate, is the embodiment of the antithesis of customer experience management (CEM), a metric that analysts, business leaders, and shareholders closely track, and a figure that reflects an ability to cultivate—or decimate—customer loyalty. CEM has come into focus as a churn buster, and from 10,000 feet, it’s safe to say that understanding the service experience from the customers’ perspective will reduce churn.
Dive a bit deeper, however, and the specific strategies that reduce churn aren’t immediately apparent. This is due in part to the proliferation of CEM solutions on the market and the subsequent confusion that has precipitated; these days, everything seems to wear a CEM badge. It’s also due, in part, to the fact that most customers want the same thing they’ve always wanted—service that is reliable, easy to use, and competitively priced.
From network upgrades to proactive customer care systems to loyalty programs and revised corporate mission statements, not all investments equal big returns in CEM land. When it comes to stopping churn, what strategies actually work? What do customers really want, and how can service providers deliver on these needs?
When I interviewed ten professionals from North America, South America, and Europe regarding their cellular service, one thing became apparent: mobile service providers have an image problem. This is particularly true in a mature, high-priced market like the United States, where customers view the phone company like the flu shot with an ad campaign.
“What really distinguishes one from the next besides their advertising campaigns?” said Seth Abrutyn, Author and Professor of Sociology, University of Memphis. “It’s like Coors, Miller, and Bud - they all taste the same, as we see in blind-taste tests; they all look the same; and they are all terrible. So, what do they do? Ad campaigns: the "coldest beer” (which is silly, because all beers in the same fridge are the same temp); "triple filtered"; "the king." There are no substantive differences. And, with the phone companies, I have no clue if there are real differences or just invented ones.”
It’s for this very reason that T-Mobile mounted its Un-Carrier campaign and market strategy in January 2013, which seeks to distance itself from the traditional stigma by eliminating sore spots for wireless customers. In the past year, T-Mobile has eliminated traditional contracts, instituted device trade-in incentives, simplified its plans and pricing, instituted unlimited mobile data, rolled out a new device upgrade program, and launched free global mobile data. The latest iteration, Un-Carrier 4.0, announced at CES in January, offers to pay off early termination fees for families who switch from Verizon, AT&T, or Sprint to T-Mobile.
Alongside these programs is a slick ad campaign that paints T-Mobile’s competitors as exactly what many consumers believe them to be: out-of-touch, arrogant, and greedy. It’s as if T-Mobile is saying, “Forget those old guys, come try something new and cool.” And in reality, iconoclastic T-Mobile CEO John Legere, who crashed an AT&T event at CES 2014 and posed for pictures, has said that and more. “What a stupid, broken, arrogant industry,” he said, during the CES 2014 event in Las Vegas.