One month from now, the holiday gift-giving frenzy will have subsided and holiday gift recipients will be well entrenched in the traditional return and exchange of gifts. With wireless service touted this season as the perfect holiday gift, will wireless phones be on the return/exchange list with ugly ties, shirts that don’t fit and gadgets that were only interesting for the first couple of hours?
In the hustle to bring new customers in the door this holiday season, carriers should take a common-sense approach when it comes to combating potential churn, said Jim Airy, vice president of marketing for Metapath Software Corp.
“There’s a big push during the holiday season to get as many customers as possible, and that’s good,” he said. “The downside of that equation is often during the holiday season, people are running around and retailers are trying to sign up as many people as possible, and customers get phones without being educated about the service.”
That can lead to increased churn, said Airy, because customers’ expectations and the reality of the service turn out to be different.
According to a report by Andersen Consulting, more than 30 percent of churn occurs within the first six months of service. Richard Siber, an analyst with the firm, said post-holiday churn during the first quarter most likely will consist of customers who either received the phone as a gift or bought it on a whim during heavy holiday promotions, dropping out of the system completely. Carrier-to-carrier churn, if it occurs, will happen later when subscribers re-evaluate their wireless needs, said Siber.
Carriers are addressing the problem by increasing brand awareness and rate-plan awareness as well as extending many rate plans out for several months or years, said Siber.
Airy said the most effective tool in combating post-holiday churn is for carriers to make it clear to customers that a wireless phone won’t behave exactly as a landline phone does.
“It’s a matter of setting reasonable expectations during this intense selling season,” said Airy, whose company develops software to help carriers build customer loyalty to the network. “Carriers need to take the time to educate customers about what they’re buying.
“It’s the kind of thing that is very easily forgotten during the rush to get numbers at the end of the year,” noted Airy. “But if you don’t do it, you’ll pay in the end.”
