The Impact of Channel Usage on
Customer Churn in the
Telecommunications Industry
Ilona Bosma
S2744023
i.n.bosma@student.rug.nl
MSc Marketing Intelligence and Management
Presentation Outline
1. Introduction2. Theoretical Framework 3. Results
4. Study Implications
1. Introduction
Churn Rate in telecommunications market 15-30%
(Ascarza, Iyengar & Schleicher, 2016)
Churn-related costs up to $10 billion annually
(Ascarza et al., 2016)
Market is getting increasingly saturated
Successful churn management
Understanding the need for active churn management Understanding the drivers of customer churn 01 03 02
What are important determinants of customer
churn in the Dutch telecommunications
market?
2. Theoretical Framework
Churn Drivers Relationship Breadth H1: -Relationship Depth H2: -Relationship Length H3: -Age H4: -Gender H5: -Prior Churn H6: + Price H7: + Promotion H15: + Customer Churn Channel Choice H8-H14 H163. Results (1)
Relationship Aspects
Variable Odds Ratio - Offline Odds Ratio - Online
Insured 0.8422
-Accessories 1.2522
-Bundle 0.4995 1.0744
3. Results (2)
Relationship Aspects
Variable Category Odds Ratio - offline Odds Ratio - online
-3. Results (3)
Customer Characteristics
Variable Odds Ratio - offline Odds Ratio - online
Age 0.9907 0.9982
Male 1.1312 1.5844
3. Results (4)
Marketing Instruments
Variable Odds Ratio - offline Odds Ratio - online
Maandprijs -
-Bundle Price - 0.9877
Additional Payment 1.0014 1.0034
Online 0.2697
3. Results (5)
Online Offline
4. Implications - Marketing Theory
- Integrate different research streams:● Churn drivers ● Channel choice
- Online vs. Offline channel
- Different price components: ● Upfront payment
4. Implications - Marketing Practice
- Firm influence- Different retention messages ● More targeted
● Lower amount
- Target customers with high churn risk
