Conductas

Churn reasons can be studied in two categories – Voluntary and Involuntary churn. The table below shows the breakup of Voluntary and Involuntary churn reasons.

Observations: Involuntary Churn

1. Unpaid bills are the major reason for involuntary churn. March saw a 16% increase over Feb. One explanation to this is that Feb has only 28 days. In comparison to Jan, the churn numbers almost remains the same. In general, the UNB disconnections in 2010 are on the rise. The subscriber base is also on the increase every month at an average of about 1.8%.

2. UNB and TWO together (unpaid bills) attribute to more than 90% of the disconnection cases.

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3. There are cases wherein the customer has not received the bill or wherein he has a bill dispute. Hence, he has not made the payment. This was observed by analyzing the complaints that the customer has logged in.

4. The top 3 reasons for IV disconnections are the same across all AON categories of subscribers.

5. It is interesting to note that there are no UNB disconnections for those customers who are on Direct Debit. Hence, this can be looked as one way to reduce UNB disconnection. 6. Most of these unbilled cases are primarily from BPO and call centers. Most of the

subscribers choose to not pay the last bill before they leave the organization. As understood from the collections department, attempts to trace them are also in vain, since their alternate contact numbers are not reachable.

7. It was also noted that most of the subscribers in the UNB disconnections are in the age group of 25 – 30 years (about 40%). Moreover, they are mainly from companies like TCS, Reliance Infostream, Accenture, Intelenet, Reliance Group etc. It is also interesting to note that this segment is also the biggest revenue churners.

Recommendations

1. Direct Debit - should be promoted.

2. E-Bill should be encouraged– It was observed that many companies and individuals were open to E-Bills. However, they were not taking the initiative themselves for subscribing to E-Bill. Hence, I feel that if there were an active campaign to promote E- Bill in all companies, there would be many lesser complaints over bill delivery delays and payment delays.

3. E-Bills could also be sent proactively to all those subscribers whose email address we have in the system along with their hard copy of their bills.

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4. Early payment - This campaign was once carried out and it saw a surge of 4% in on- time payments. Such initiatives help in reducing UNB disconnections.

5. Alternate Contact Numbers and Reference Checks- should be obtained and verified too in order to improve contactability. Presently, reference numbers are ID proofs are being obtained. However, reference checks should be done in especially companies like call centers where the subscribers are not traceable after they leave.

6. Alternate contact numbers should not be company board line numbers. Ideally, they should be mobile numbers.

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Observations: Voluntary Churn

1. Almost all enterprise voluntary churn is tagged under COO Change of ownership. This practice makes it difficult to identify the real reason for Churn. E.g., Taj and TCS have churn because of competition from TATA and Essar group has churn since they do not give away their numbers when employees leave the organization. Hence, they are kept in safe custody.

2. From the retention team, it is understood that most of the COCP disconnection reasons are not gathered. Partly because the authorized signatory in the organization sends out an email for disconnection without stating the reason. Moreover, some companies do not want to be disturbed by retention team. Hence, for such companies retention attempt is not made.

3. Only a very few of these COCP numbers could be contacted for retention efforts. Mostly the reasons for disconnection given were – moving out of town or personal reasons. This additional information is not captured when tagging under COO.

4. The retention count for COCP is very low. Only about 1 or 2 cases out of 10 are retained.

5. Also, noted in many corporates where tariff is low (like Godrej); there are many disconnections due to multiple connections (in a single individual’s name). Many connections are taken for others in the same corporate tariff, but then there connections are churned since the individual does not want to take responsibility against nonpayment and other issues.

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Recommendations

1. Disconnection codes for Enterprise need to be revised and clearly indicate the actual reasons.

2. To make the retention effort more effective, enterprise should have a separate retention call center. Presently, only email requests for disconnection are handled separately. Moreover, for the IOIP customers, they are treated on par with the regular postpaid subscribers.

3. Alternate contact numbers should be obtained.

4. For COCP disconnection requests from the authorized signatories (Generally, the SPOC (Single Point of Contact) in an organization for dealing with mobile connections. This could be an individual in the admin department or the HR department.), the reason should be obtained and the churn should be tagged with the real reason. This can be done either by issuing a disconnection request form to the authorized signatories or by taking the request along with the reason through the e-mail.

5. Research indicates that the 4 most important factors that cause churn are - Service, Tariff, Network and Brand Image. Service and tariff are the two things that we can improve on a relatively shorter period of time in order to reduce dissatisfaction.

Revenue Churn

The actual number of disconnections in a month can be a good indicator of Churn. However, it does not fully represent the actual loss to Vodafone. Hence, there is a need to study churn in terms of Revenue loss too. Revenue churn is obtained by taking the sum of all the ARPU of all the subscribers churned for a Company X for that month.

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The table below shows the revenue churn for the month of March for the top companies. Though the data is sorted in the descending order of the number of churns, the revenue churn numbers don’t arrange themselves in the same order.

Observations

1. A month on month analysis of revenue churn would reveal that there are some companies that are the major revenue churners every month.

2. Number of churn doesn’t indicate the revenue loss to Vodafone. E.g., Tata Power may show more number of churn than say Barclays (Ref Table above). However, in terms of revenue, the loss from Barclays exceeds Tata Power by virtue of the larger ARPU from Barclays.

3. Churn can also be tackled by treating important customers or high value users differently. This would include

a) Loyalty schemes for high value users

b) Having a separate customer care for high value users. c) Promotional campaigns that target this group specifically.

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Suggestions

1. Database and MIS improvements – Superior information gives the competitive advantage. Hence it is essential that our database cater to the additional information that is required today.

a) Marketing intelligence/ Competition Data - We should gain knowledge of what our competition does in terms of not only tariffs and schemes they offer to corporates, but also in terms of promotional activities and products, they have.

b) Customer demographics -

i. Get to know certain lifestyle information about customers so that you could offer tailored retention packages

ii. This can be obtained whenever the customer interacts with a call center, or when he signs up for a service. Make him fill out a small questionnaire that will help us build this information.

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iii. This information could be on their Interests, Profile, and Job etc.

iv. The importance of user profiling based on mobility has also been elaborated on white papers at Vodafone global enterprise solutions website. http://enterprise.vodafone.com/insight_news/whitepapers/

c) VAS Subscription information – Collect information on the type and frequency of VAS one has subscribed for. VAS has huge potential. Hence, it shall be covered separately.

2. Churn should be studied separately for Black Berry, Data Cards, Voice and VAS. 3. Increasing Data Usage / VAS – Bharti Airtel has launched their online application store

called App Central with over 1200 application for download (most of them being free) across 25 categories for business, games, books, social networking and other needs. The reason being – VAS has tremendous potential.

The VAS industry in India generated revenue of US$ 1.2 billion in 2007–08 and is expected to reach US$ 4.0 billion by 2015.

Major growth drivers for VAS in India

 Increasing focus on localization and availability of content in local languages

 Development of M-commerce applications, such as booking tickets and making bill payments

 Availability of mobile TV and development of shows, films, images, news, etc.,

 Availability of complete subscriber data has helped in reaching niche audience leading to a growth in advertising revenue through M-marketing

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Suggestions Description Purpose

Customer Profiling

Gathering more information especially on Interests, Profile, Job, Mobility of the user and alternate contact numbers would help in tailoring retention programs and customer engagement much better.

Helps in tailoring retention process Targeting VAS services to a right customer base. Process Improvements

Taking a leaf out of Six Sigma practices, we could look at MOM (Minutes of the Meeting) trackers, RCA (Root Cause Analysis) Matrix and Issue Trackers (for SMs to ensure compliance with deadlines). Such tools will help in improving customer satisfaction and track service levels. E.g. The Six Sigma project implemented by

Self-management practices to track and improve. Will be useful in measuring output and effectiveness.

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Airtel helped the company gain Rs.200 and increased the customer satisfaction index from 61 % to 82 %.

Address Verification through SMS or Email

We could ask the user to confirm the address in the system through sms. The user could respond by saying YES or NO to confirm the address. (toll free)

To reduce first bill and further bill delivery

failures/delays Welcome and

first bill call management - ideal for gathering more information

There should be a first bill and welcome call especially for enterprise customers. This is also an ideal opportunity to gather additional customer information (like interests, or if he would use roaming frequently etc...) Primarily for customer engagement and gathering additional information Awareness campaigns

Low users of a particular service should be targeted by awareness campaigns

ARPU can be increased.

Mail or SMS online access Ids and passwords

We should proactively send customers User IDs and Passwords (like most banks do). It is then up to the customer to use the online portal or leave it.

To encourage the customer to start using the online portal.

Developing 12 to 18 months contracts

In order to push the customer into staying with Vodafone for longer periods, we could give them more incentives to go for 12 to 18 months contract. This could be with blackberry or iPhone or regular voice services.

Retention becomes more effective

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