In all but a few markets, growth is no longer about new additions. First-time subscribers are few and far between, so the value of existing subscribers has become critical. Retaining valuable subscribers is now imperative to the future success of a network. The cost of win-back in lost revenue and acquisition expense has put churn prevention and loyalty enhancement at the forefront of customer strategy.

As competition for subscribers becomes more intense, operators are becoming ever more inventive in their approach to customer retention and loyalty. On top of tried and tested rewards schemes, operators are implementing myriad other approaches in the hope that they will encourage subscribers to stay where they are for the long term.

In postpaid, contract terms are lengthening; 12-month contracts have almost disappeared in some markets and some operators offer contracts of only 24-months or more. Conversely, plan-only, monthly rolling contracts are also on the increase, as operators look to reduce their outlay on handset subsidies.

Prepaid subscriptions made up 70% of total global subscriptions in 3Q08 and their influence is growing; so, although postpaid subscribers offer greater and more reliable lifetime value than most prepaid subscribers, prepaid churn, is also being targeted by operators. Generic rewards schemes are giving way to segmented retention programs, and operators are evaluating community-based, user-generated services for their loyalty potential.

Mobile number portability (MNP) implementation is gathering pace across the world. Much of Western Europe and North America is accustomed to the easy freedom subscribers have to move operators, and many operators in the rest of the world will soon learn firsthand what this freedom will mean for their business. But MNP does not necessarily mean increased churn and increased costs; thorough preparation is central to turning MNP implementation from threat to opportunity.

This is an extract from the Mobile Churn And Loyalty Strategies: How To Retain Valuable Customers report.