Managing service quality to retain the long-term loyalty of its customers is fundamental for TV operators’ growth and profitability, says Johan Görsjö, director of product management, Agama Technologies
Opinion
Churn, the process of losing subscribers over time, is a major headache for TV operators worldwide. As the payTV market develops, all operators – be they direct-to- home, cable, OTT or IPTV – face greater competition. The digital switchover is now completed in many markets, and operators grow mainly by winning over customers from competing digital TV platforms. Offering the right content at competitive prices is vital, but managing the service quality to retain customers is equally as important for growth and profitability. Losing customers before they have started to generate revenue is a recipe for red numbers. Not to
Working to
reduce churn rates by
automatically identifying customers at risk … is a great opportunity for operators
mention the risk to the corporate brand value, coming from dissatisfied customers swiftly sharing their experiences in social media. A reduced churn rate has very clear business implications. Let’s say you have one million customers and in total grow with 10k customers in one year. With a churn rate of 8 per cent, you in fact lose 80k customers while adding 90k new customers, making the total +10k during the year. By lowering the churn rate to 7 per cent, you would instead have lost 70k customers, meaning a total growth of 20k customers during the year. Congratulations, you’ve just doubled your growth rate. Greater customer loyalty automatically also brings higher revenues, due to their ARPU directly contributing to the bottom line after initial costs, such as the CPE and installation, have been covered. In essence, your