Managing service quality to retain customers is fundamental for TV operators’ growth and profitability, says Johan Görsjö
Churn, the process of losing subscribers over time, is a major headache for TV operators worldwide. As the pay TV 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 now 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 important for growth and profitability. Losing customers before they have started to generate revenue is a recipe for red numbers – not to mention the risk to the corporate brand value that can come 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 by 10,000 customers per year. With a churn rate of 8%, you lose 80,000 customers so, if you add 90,000 new customers, you achieve that growth of 10,000 customers. By lowering the churn rate to 7%, you would instead have lost 70,000 customers, resulting in growth of 20,000 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 total customer base will be more profitable. With better profitability, the higher margins could allow for creating new and even more competitive end-customer offerings.
Insight into and understanding of the customer experience and quality distribution is essential in identifying customers at risk of churning. You simply cannot act on information you don’t have, and you need objective information before it’s too late.
At Agama, we are convinced that utilising a solution for real-time 24/7 service quality monitoring combined with intelligent analytics is a winning strategy for operators to reduce churn. This facilitates rapid reaction to a customer’s problem and makes it possible to take proactive steps to retain the customer – before they move to the competition.
Such a solution must of course support automation and proactive workflows; manually finding customers experiencing problems scales poorly for millions of subscribers.
Proactively working to reduce churn rates by automatically identifying customers at risk, and the issues behind their problems, is a great opportunity for operators that thus far has not been exploited to the fullest. Agama has had the privilege of working in close cooperation with a number of leading operators for several years, giving us extensive real-world experience in such advanced quality and customer satisfaction management and analytics.
Visit www.agama.tv for more information, and please feel free to contact us to discuss churn reduction strategies and how Agama’s solutions can support you in this challenge.
 | The author, Johan Görsjö, is director of product management at Agama Technologies |
