Churn management
The Churn Management refers to the attempt to churn to avoid. This applies in particular to sectors in which the customer is tied to a company for a certain period of time due to contractual obligations and could change providers after the deadline (e.g. mobile phone contracts). With churn management, customers at risk of churning must be addressed in good time before the contract expires and they must be persuaded to stay. In addition to rational reasons such as customer churn due to lower prices and conditions from competitors, customer-induced churn can be of a complex nature and, in the case of services, cannot be traced back to purely economic causes (price-performance ratio). So play z. For example, the behavior of employees and the transparency and freedom from feedback of the service process itself play a role and can induce customers to change providers. Long waiting and processing times, changing contact persons, impolite behavior on the part of service staff, a lack of empathy and problem-solving skills lead to customer churn. This phenomenon can be observed in many business-to-consumer (B2C) markets. Due to the relatively low barriers to change and the almost identical level of service and quality, cutthroat competition is now taking place in many B2C markets.
It is important to first determine the likelihood of churn and customer value in advance . Thus, efforts are only made with profitable and profitable customers. Perhaps it may be better for a company to make it easier for an unprofitable customer to churn. There are several methods of determining customer value, one of which is, for example, customer lifetime value .
There are three types of churn:
- Active churn: is initiated by the customer himself and can be prevented by direct marketing action options.
- Passive churn: is initiated by the company and the company's options for action are restrictions here, e.g. B. reminders
- Rotational churn: is also initiated by the customer by giving notice "as a precautionary measure" before the contractual obligation expires without the direct intention of switching to a competitor.
Individual evidence
- ↑ D. Pick: Churn Management. In: WiSt - economics studies. February 2016, pp. 60–64.
- ↑ J. Nesper: (Un) fairness-based customer churn in service relationships - success factors and strategies for churn management in the telecommunications industry. Hamburg 2014.