Actively retaining these customers would be worse as it would be a costly exercise, spending money on customers with no profitable impact. Letting them churn would be far more effective in driving profitability up. Customers churn for different reasons. A one-size-fit-all approach will not be appealing and does not make sense from an economical stand-point for the telcos. If done well, telcos can generate significant value from retention programs.
In APAC, a telco with less than one million subscribers generated $30 million per year in revenue through precision targeting, i.e. by defining the appropriate segment level treatments for its churners. The figure above shows the four focus areas for a successful retention strategy. Telcos have an opportunity to better manage their churn, not only to identify churners, but also on differentiated treatment, based on their segment and lifetime value. All churners are equal... in quantity, but some are much higher value than others.
D. Robert Rutledge is Accenture's APAC communications, media and high tech APAC strategy lead;
Guillaume Sachet is Accenture's communications, media and high tech ASEAN strategy lead