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Customer Churn:
Learn from the
biggest players how
to stop it!
WHITEPAPER
REPORT BY
•	 Expert focused on loyalty tactics in
the telco industry.
•	 For 20 years worked for
telecommunication
companies; for the last 5
years focused on loyalty
activities development,
proactive retention,
effectivities optimization
and churn reduction.
•	 Her day job was focused
on searching for symptoms of
resignations to stay one step
ahead of customers thinking about
resigning.
•	 Now working as a consultant
for telco and service-based
businesses to improve clients’
retention processes aimed at
churn reduction.
Ola Pytel
- about the
author
2Customer Churn: Learn from the
biggest players how to stop it!
Improving loyalty in the telco industry
is a huge challenge due to it being a
very competitive market, with rapidly
growing customer requirements. Many
companies fight for customer loyalty in
the simplest way - with price reduction.
It’s not a long-term approach. It’s
important to identify risky moments in
the Customer Lifecycle and introduce
effective processes around them.
Listening to customers opinions
and responding to them, improving
products, providing extra value or
benefits to your customers, and
monitoring and analyzing the results
from both the short-term and long-
term perspectives is key. You should
be open-minded, carry out many tests
to create your own processes, and
perform regular optimization-based
reviews.
It is also necessary for the CRM
Department to assist (predictive
models, base system integration) based
on a clear Customer Value strategy.
In this whitepaper, we describe a
few methods of effective process
management that improve the
loyalization rate in-company. We
hope to inspire you towards further
development.
Overview of
loyalty in the
telco industry
Customer Churn: Learn from the
biggest players how to stop it!
3
The most sensitive part of Customer
Lifecycle Management is the end-of-
contract period. At this time, customers
show the highest resignation rate.
Competitors become more active than
usual, and customers look around for
new solutions for the next 12/24/36
months.
While working on loyalty in telecoms, we
focus on 3 key metrics:
•	 MOC - middle of contract
•	 EOC - end of contract (2 months
before end of contract and 2
months after end of contract)
•	 OOC - out of contract (without
commitment, 2 months after the
contract has ended)
Let’s dive deeper into what a telco
company should do, and how to contact
your customers to get the expected
result.
1. Proactive
retention
concentrated
around End
of Contract
period
4Customer Churn: Learn from the
biggest players how to stop it!
•	 Act before your customers start thinking about resignation
•	 Be faster than your competitors to stop them poaching your customers
•	 EOC customers (-2/+2 months EOC) have a churn rate 3 times higher
than OOC customers
•	 The highest resignation rate starts about 2 months before EOC
Key goals & assumptions
Start of contract
0mOOC
MOC
EOC
24m
23m
4m before end
of contract
4m after end
of contract
End of
contract
1m - before
end of contract
increased
possibility of
churn
CUSTOMER
LIFECYCLES
5Customer Churn: Learn from the
biggest players how to stop it!
How to act?
EOC general assumptions
First, you should segment your database based on Value & Risk Calculations.
Then use predictive models to create segments. Below you can see an example of such
segmentation.
Segmentation defined specific activities:
•	 Monetized actions aimed at GREY & RED segments on BAU/ New Build/
strong competitors area
•	 Risk mitigation action aimed at GREEN & BLUE segments on BAU/ New Build/
strong competitors area
Value
Churn
risk
1
1 2 3 4 5 6 7 8 9 10
2
3
4
5
6
7
8
9
10
BLUE - most valued customers
RED - low churn risk and
low value
GREEN
- high
churn risk
GREY - medium value and
medium churn risk
6Customer Churn: Learn from the
biggest players how to stop it!
REPORT BY
Download Full eBook
Customer Churn: Learn from the biggest
players how to stop it!
Download Book
Loyalty Platform
in Open Source
with ready-to-use features
Know more
Customer
Management
Reward
Campaigns
Rules for
earning
points
Customer
Portal
Panel for
offline

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Customer churn - how to stop it?

  • 1. Customer Churn: Learn from the biggest players how to stop it! WHITEPAPER REPORT BY
  • 2. • Expert focused on loyalty tactics in the telco industry. • For 20 years worked for telecommunication companies; for the last 5 years focused on loyalty activities development, proactive retention, effectivities optimization and churn reduction. • Her day job was focused on searching for symptoms of resignations to stay one step ahead of customers thinking about resigning. • Now working as a consultant for telco and service-based businesses to improve clients’ retention processes aimed at churn reduction. Ola Pytel - about the author 2Customer Churn: Learn from the biggest players how to stop it!
  • 3. Improving loyalty in the telco industry is a huge challenge due to it being a very competitive market, with rapidly growing customer requirements. Many companies fight for customer loyalty in the simplest way - with price reduction. It’s not a long-term approach. It’s important to identify risky moments in the Customer Lifecycle and introduce effective processes around them. Listening to customers opinions and responding to them, improving products, providing extra value or benefits to your customers, and monitoring and analyzing the results from both the short-term and long- term perspectives is key. You should be open-minded, carry out many tests to create your own processes, and perform regular optimization-based reviews. It is also necessary for the CRM Department to assist (predictive models, base system integration) based on a clear Customer Value strategy. In this whitepaper, we describe a few methods of effective process management that improve the loyalization rate in-company. We hope to inspire you towards further development. Overview of loyalty in the telco industry Customer Churn: Learn from the biggest players how to stop it! 3
  • 4. The most sensitive part of Customer Lifecycle Management is the end-of- contract period. At this time, customers show the highest resignation rate. Competitors become more active than usual, and customers look around for new solutions for the next 12/24/36 months. While working on loyalty in telecoms, we focus on 3 key metrics: • MOC - middle of contract • EOC - end of contract (2 months before end of contract and 2 months after end of contract) • OOC - out of contract (without commitment, 2 months after the contract has ended) Let’s dive deeper into what a telco company should do, and how to contact your customers to get the expected result. 1. Proactive retention concentrated around End of Contract period 4Customer Churn: Learn from the biggest players how to stop it!
  • 5. • Act before your customers start thinking about resignation • Be faster than your competitors to stop them poaching your customers • EOC customers (-2/+2 months EOC) have a churn rate 3 times higher than OOC customers • The highest resignation rate starts about 2 months before EOC Key goals & assumptions Start of contract 0mOOC MOC EOC 24m 23m 4m before end of contract 4m after end of contract End of contract 1m - before end of contract increased possibility of churn CUSTOMER LIFECYCLES 5Customer Churn: Learn from the biggest players how to stop it!
  • 6. How to act? EOC general assumptions First, you should segment your database based on Value & Risk Calculations. Then use predictive models to create segments. Below you can see an example of such segmentation. Segmentation defined specific activities: • Monetized actions aimed at GREY & RED segments on BAU/ New Build/ strong competitors area • Risk mitigation action aimed at GREEN & BLUE segments on BAU/ New Build/ strong competitors area Value Churn risk 1 1 2 3 4 5 6 7 8 9 10 2 3 4 5 6 7 8 9 10 BLUE - most valued customers RED - low churn risk and low value GREEN - high churn risk GREY - medium value and medium churn risk 6Customer Churn: Learn from the biggest players how to stop it!
  • 7. REPORT BY Download Full eBook Customer Churn: Learn from the biggest players how to stop it! Download Book
  • 8. Loyalty Platform in Open Source with ready-to-use features Know more Customer Management Reward Campaigns Rules for earning points Customer Portal Panel for offline