Usage Billing Can Reduce Churn With Personalized Offers

As broadband markets mature, churn becomes the critical metric for network monetization. Studies have shown that cost and billing are a key churn driver representing 40% of subscriber attrition (source: Nokia 2016 Global Acquisition & Retention Study). Other studies have shown that ½ of these subscribers feel they are not receiving value for money and hope to find it with another operator.

So how do service providers effectively address “value for money” concerns to save the customer? In most cases operators are limited to speed and price but both are ineffective for different reasons. Offering the customer a speed increase may not be effective if the customer is perfectly happy with their current network performance. Offering the customer a temporary discount on price simply pushes the churn event out by a few months.

“Value for money” concerns can be better addressed with usage based plans that reflect their actual service usage. By providing loyalty and retention teams with insights into historical customer usage patterns, they can match customers to plans that meet their actual needs. This sustainably improves the save rate by right sizing subscribers to a personalized plan. We have seen a major European MSO reduce churn by up to 5% using this retention tactic.

Learn more about how usage based services can reduce churn and increase ARPU in our Usage Billing Best Practices White Paper