Thursday, June 10, 2010

Churn & Revenue Assurance Part 1: “Breaking Up is Hard to Do”

Before you read this post, you might also be interested in a previous post: Do Customers Want Telcos/Technology to Slow Down or Speed Up? A Revenue Assurance Perspective.

I’m sure most of you will have broken up with someone before, or been dumped by a former girlfriend or boyfriend. Honestly, I don’t really know what that’s like, because I’ve been with the same woman, my first girlfriend, since I was 17 – we’ve been together now about 14 years.

But I know what my friends tell me about their love lives, and I know how these scenes always play out on TV and in movies. And the situation of breaking up with someone sounds a lot like the situation with Churn – something I, like everyone else, absolutely have firsthand experience of.

And as a Revenue Assurance guy, I’m always going to be interested in something that affects the wallet share and revenue of the telco.

“It’s Not You, It’s Me”

When you break up with someone, you can’t always put into words why you want to break up, and you certainly don’t tell the other person what the real reason is – “I don’t like your hair” “your parents are evil” “you snore” “I think I can do better” “you don’t make enough money” or whatever.

Instead you want to sound reasonable. You want to sound like you’re a rational person making a logical decision.

So you say “it’s not you, it’s me” “we’ve just become different people” “we’ve just grown apart” “I don’t want to be a burden to you” “you should find someone you really want to be with” “we can still be friends” – none of that’s true, but that’s what you say in that situation because you want to sound reasonable.

And I’m telling you that’s exactly the situation when customers churn. Because we’ve all heard it before. When the retention department asks them why they are leaving, customers always only say one of two things – the customer service was bad, or service is too expensive/costs too much/price is too high.

Are Customers Liars? Or Are They Stupid? Neither!

What I’m saying to you is that when customers say price/customer service, they’re lying – if not to you, then to themselves. Just like when you break up with someone, when you churn, you want to sound rational and reasonable. And at the point of cancelling service, blaming price/customer service sounds logical.

But who can blame customers for doing this – you certainly don’t blame your ex-boyfriends and girlfriends for trying to be nice to you and not pointing out all your faults when they dump you.

So why do customers really churn? When they are interviewed in detail, or are brought in for focus groups, that’s when the real truth comes out. That’s when you discover that the problem is much, much more complicated.

Because you start to wonder if customers are stupid – it turns out they cancelled service because “my phone was an ugly color” “my sister said the company is evil” “my mother thinks the radiation is bad for you.”

What I’m telling you though, is customers are not stupid.

The real issue here is that telcos are service providers. We are not selling physical products you can touch and hold and look at, that have a real physical presence and effect.

When I buy a generic/non-branded drug like ibuprofen or acetaminophen, it still works exactly the same as Advil or Tylenol. When you buy a car, you can say it looks ugly, the engine is too loud, the door fell off – it’s not so easy to say that about a service like voice or data or content delivery.


Until then, all I have left to say is I LOVE Revenue Assurance.

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