Mobile user loyalty plummets
Mobile customer loyalty has fallen to an all-time low, with the average customer now switching provider every 27 months, researchers warn.
This average is more than twice as frequently as a decade ago, according to research into customer churn from Strategy Analytics.
Global customer churn reached a record high of 44% last year, the report shows.
The contract-free prepaid market is predictably to blame for shortening the average. The average prepaid customer lifecycle is now a mere 17 months, compared to 67 months for postaid users. In Asia-Pacific, pre-paid churn is nearly 100% per year.
According to Strategy Analytics director of wireless research Phil Kendall, operators' own aggressive marketing and pricing strategies in some regions have played a role in the problem.
“Promotional SIM card activity in developing markets [has made] customer loyalty virtually obsolete in some countries,” he said.
“It doesn’t cost much to push new SIM cards into the market, however, operators would still benefit by promoting targeted offers to existing users which build longer-term, more valuable, customer relationships.”
But the report notes that churn is far more expensive to manage in the post-paid market, where handset subsidies often come into play. To this end, operators are finally looking to models beyond subsidies, including leasing or payment instalment plans.