Retaining Customers

Churn Defined

The churn rate (also known as the attrition rate) in telecommunications is defined as the number of customers leaving during a period, divided by the average customer base during that period.  It is normally calculated as follows:

Leavers over period/((Opening Base +Closing base)*0.5)

Churn is usually expressed as an annual rate, though in some markets (notably the USA) churn is expressed as a monthly rate. Reducing churn is a challenge for almost all mobile network operators.

Contagious Churn

Subscribers who are in the environs of recent churners will experience increased pressure from their friends to move networks.  We have seen this ‘contagious churn’ phenomenon  numerous times with leading mobile phone companies.  The role of the community in churn contagion is crucially important in determining levels of churn contagion, because community members exert a higher influence on each other than can be measured by pure calling circle data.

Idiro Technologies has developed a solution to predict churn based on community behaviour. In the same way that people share any personal information with their friends, they tell others if they are unhappy with their mobile phone company or if they have changed network. By analysing a selection of a mobile operator’s call records, Idiro’s algorithms build a social network model’ of the operator’s customer base.  This defines the communities within and, equally important, the levels of influence that each individual has within their community and across the wider network.

One of Idiro’s mobile phone operator customers found that by implementing the Idiro Retention module, churn predictive accuracy increased by 66%.  This typically translates into a 66% increase in retention campaign success, with corresponding decrease in churn rates.

To learn more about the benefits that Idiro Retention can bring to your company, contact Idiro via: experts@idiro.com


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