Traitors and Deserters

A report from Forrester says 24% of US mobile subs switched providers between 2004 and 2005, and another 16% plan to switch in the next two years or more. Number portability, commoditized mobile offerings, and lifestyle-based service providers will continue to create churn, going forward.

So as the market nears saturation, the report says, as nearly 98 million US households will have a mobile phone by 2010, subscriber churn – meaning, all those people leaving your brand or service – will become a huge issue to tackle for telcos in the future.

The 24% of US mobile subs who switched carriers between 2004 and 2005 are younger, more likely to be female, less likely to be white, and are more optimistic about technology than the average mobile subscriber.

I suspect that the idea of losing one-quarter of your customer base can get up and walk away from your company is something that a lot of CEOs are staying awake at night and worrying about. That’s just such massive numbers.

I also suspect that the numbers are too small. Most parents buy their phones for their kids aged 13-15, and those kids in turn trade-up and out from one carrier to another every single year. The churn will only get worse.

In this game of musical mobile providers, the biggest — Verizon and Cingular — win, while the littler guys like Alltel, Cellular One, and U.S. Cellular are just treading water, says the report.

So how can you stay in the game? I guessed that customer service or lifestyle association would be something that swayed these switchers. But in fact, the report states that:

Consumers who are planning to switch mobile carriers in the future are spending more than $4 more per month on mobile service than those who are likely to stay put, and are primarily looking to improve the price and service aspects of their mobile experience. Handset selection, customer service, data services, and unique content are all secondary considerations, even for those consumers who currently use advanced mobile features like data or messaging.

The report also suggests some solutions for beleaguered telcos trying to plug up the holes in their customer retention programs and campaigns. Surprisingly, the suggestions all skim the surface of an experiential approach to servicing their customers.

— Allow customers to store photos, text messages, emails, and IM on the network.
— Entice the big spenders with the hottest upcoming handsets
— Be an objective advisor to confused consumers
— A multiservice bundle, including mobile, from one company will make it less likely that the current subscriber will defect
— The delivery of audio and video via handsets provides unique leverage

These recommendations assume a more empowered and demanding customer, one who has a lot of spending power and want s to be told the truth. And, as always, content will be kind when it comes to digital delivery.

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