Factors behind mobile phone loyalty and churn

WM Circle Logo

By: Wise Marketer Staff |

Posted on January 24, 2007

Although churn is still widespread, consumers are growing ever more attached to their cell phones, with 14% reporting that they no longer subscribe to landline phone services, and 33% strongly agreeing that they feel lost without their cell phone, according to a study from comScore Networks.

The first in a two-part series of reports on the wireless industry, the 'comScore Networks Wireless Report' was based on a survey of US consumers who use wireless telephone services, and analysed consumers' satisfaction with wireless carriers, carrier switching behaviour, and usage of wireless features that go beyond voice communication (such as wireless internet).

Satisfaction is key
Consumer loyalty and satisfaction among wireless subscribers are clearly related. According to the study, only 6% of respondents who were highly satisfied with their carriers stated that they were likely to switch carriers at the end of their contract. In contrast, 76% of respondents who were highly dissatisfied with their carrier were likely to switch. Furthermore, 44% of the highly dissatisfied respondents were very likely to switch carriers prior to the end of their contract, signifying that the deterrent effect of penalty fees only goes so far.

Not surprisingly, high satisfaction strongly correlates with the likelihood to recommend a carrier to a close friend or family member. Eighty-eight percent of those who were highly satisfied indicated a high probability to recommend their current carrier.

Churn drivers
Switching to the current cellular provider was most often prompted by a desire for improved network coverage, with 27% of respondents citing "better coverage" as their primary reason for switching. In fact, coverage was the most cited reason among subscribers of each carrier (with the exception of T-Mobile's customers, who cited "lower prices" as their top reason for switching).

Reason for switching % subscribers
Better coverage 27%
Lower prices 14%
Friend or family's carrier 13%
Better minute-level plans 9%
Plan features 9%
Promotional offer 8%
For a specific phone 4%
Other reasons 16%

Table 1: Main reason for switching to current carrier
Source: comScore Networks

As can be seen from Table 1, across all subscriber groups, "lower prices" was the second most frequently cited reason for swapping plans (14%), followed by switching to a friend/family members' carrier (13%).

More Info: