Fighting churn with rate plan right-sizing: a customer retention strategy for the wireless telecommunications industry

Getting what you paid for: Fighting wireless customer churn with rate plan optimization

“…15,16,31 Dissatisfaction on pricing has become one of the major determinants of customer churn in the service industry. 1,32 Faced with high acquisition cost, high customer churn rate and the need to further defend their market position, wireless carriers are seeking improved customer retention strategies to better protect their customer base.…”

“…In their study of the Korean wireless market, Joo et al 15 have revealed that an alarming 40 per cent of customers are subscribing to non-optimal rate plans and suggested moving some of these customers to optimal ones for retention purpose. Subsequently, Wong 16 has found that approximately 46 per cent of the Canadian wireless customers are also using inappropraite rate plans. This article aims to confi rm previous fi ndings in this area using a larger data set and also investigate the impact of rate plan suitability on customer churn rate and lifetime value.…”

“…These fi ndings are slightly higher than the previous fi ndings of 40 per cent and 46 per cent for the Korean and Canadian wireless markets, respectively. 15,16 Other descriptive statistics are summarized in Table 1 .…”

Customer Satisfaction in the Mobile Telecom Industry in Bahrain: Antecedents and Consequences

“…This might be due to fierce competition, the high cost of attracting new customers, and the similarity of services offered by the operators (Neslin, Gupta, Kamakura, Lu, & Mason, 2006;Kim & Yoon, 2004;Gerpott, Rams, & Schindler, 2001). In this respect, Wong (2010) conducted an interesting study using a usage and payment records of 1403 Canadian post-paid mobile customers over 3.7-year study period. Wong reported that greater loyalty, thus retention, is observed in customers with optimal rate plans than those with non-optimal ones.…”

“…Firms will not be able to retain their customers without satisfying them. In telecom industry, customer retention determines the success and survival of mobile service providers (Wong, 2010;Mittal & Kamakura, 2001;Leelakulthanet & Hongcharu, 2011). This might be due to fierce competition, the high cost of attracting new customers, and the similarity of services offered by the operators (Neslin, Gupta, Kamakura, Lu, & Mason, 2006;Kim & Yoon, 2004;Gerpott, Rams, & Schindler, 2001).…”