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Prepaid is growing worldwide in both developing and developed markets, and with that growth remains the problem of churn. Operators find themselves acquiring new customers and continuing to drive top-line growth, yet they struggle with really understanding their customers and driving loyalty and retention to impact their bottom line. Throughout this two-part series, we’ll explore tips for marketers who are focused on churn prevention.
Every operator knows that customer loyalty and retention are critical to bottom-line performance. But, to implement proactive loyalty and retention initiatives, operators must be able to understand who their satisfied customers are and turn those customers into enthusiastic brand advocates. Waging loyalty programs that reward customers with personalized offers is part of the equation. The other part is being able to identify early warning signs of defection and determining how and when to act for the right customers.
Here are few tips for a marketer who is focused on churn prevention:
Know the behaviors that matter: Your first order of business is to analyze the behavioral patterns of churning customers. By examining historical data, you can begin to understand the key behavioral attributes of churners including their top up amounts, time in zero balance, intervals between top up frequencies, service adoption, data consumption, etc.
Once you know how churning customers behave, you can identify what deviations from “normal” behavior point to a high churn propensity.
As an example, you may determine that a prepaid subscriber staying in zero balance eight days more than “normal” is 35% more likely to churn. Or that a decrease of “normal” data consumption by more than 40% doubles one’s churn propensity. Or that no top up for an interval 15% longer than “normal” is a super high risk indicator.
If a marketer wants to prevent churn, you have to know how churning customers behave. You have to know what’s “normal” and what’s not and which differences matter in order to detect early warning signs.
Look for what’s “normal” and what’s not for each customer
Operators can’t drive loyalty unless they understand customer behavior – at an individual level. Each day, a prepaid customer base makes hundreds if not thousands of transactional records – based on how they behave. They use mobile services (voice, SMS, data); they top up their balance; they activate services, they buy bundles or bolt-ons; they switch SIM cards; they upgrade handsets; they decide whether or not to switch carriers, and more.
What’s important for marketers is the ability to understand these behaviors at over time at an individual customer level. Then they can identify what constitutes “normal” behavior for an individual – e.g., their “normal” volume of outgoing usage, “normal” time in zero balance, “normal” interval between top-ups, etc.
Once you know what’s “normal,” you also know what’s not.
