Factors influencing customer churn rate and retention in the mobile market
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The aim of the study was to identify causes of churning, to find ways of managing it and to diagnose customers‟ communication needs. Furthermore the research tested the impact of messaging services on customer retention and whether these services could compensate for the declining revenue or become new cash cows for service providers. The units of analyses were young people of ages ranging from 15 to 24. This group was chosen because it was found, during the study, that they used new services more often than any other age group. The initial plan, however, was to interview the entire population of cellphone users. Stratified random sampling was used to randomly select the units of analysis. Interviews were conducted at the homes of respondents, in the streets and at a shopping centre. Causes of customer churning were found to be billing by service providers that confused customers and „better phone deals offered by the competitors‟ resulting in some of the respondents switching providers. Other aspects about which respondents complained and which therefore could cause churning are „poor network quality‟, „confusing pricing structure‟ and „long waiting on customer care line‟. The respondents indicated that their communication needs could be satisfied by services that are easy to use, a helpful customer care agent and being able to retain a number when switching a service provider. Therefore churning could be managed by removing or reducing the causes of it and attracting the customers by meeting their communications needs, which are, improving customer care service and designing services that are easy to use. The research was inconclusive on the messaging services. Of the three new messaging services that were studied, only one was extremely popular, while the other two were hardly used. Instant messaging was the second most used service to voice and SMS and it was also ranked second, in order of importance. The other two messaging services, mobile email and MMS, received low rankings from the respondents. In addition more than a quarter (27%) of the respondents had never used mobile email. The implications of these findings are that service providers should improve their customer care service and design services that are easy to use.