Possible ways to reduce churning might include keeping track of what the competition is doing and matching their offerings constantly. However this strategy is not sustainable in long run, because the cost of introducing a new service and then to get sufficient customers to buy into that service takes time, during which even more services appear on the scene.
More over there are costs involved in acquiring a new customer. Also the new customer does not start generating revenues for Hutch right from day 1. There is a break even point associated with a new customer.
This indicates that it is better to retain an existing customer rather than going after a new customer. So what are the options open for Hutch regarding Retention program? Another way to retain a customer is to monitor the usage pattern of the customer, their psychographic profile and then to customize according to his/her needs. This whole exercise of monitoring and analyzing the customer should be thought of as “Retention”.
Currently the concept of retention is that if a customer is closing a connection with Hutch, Hutch personnel should talk to the customer, find out the reason behind this move and if possible to retain the customer.
However to answer the question Are we too late? , the process of retention should begin as soon as the customer is acquired. Hence the retention team should be a super set of Customer Care Department, instead of the other way round. They should be the people who track the customer usage pattern and based on the analysis of this usage provide insights to the Customer care department on what offering to make for a particular customer. This means moving from the current “reactive strategy” to “pro-active strategy”.
They should try to prevent a situation where customer is forced to terminate his/her relationship with Hutch. Right now the company’s policy seems to be of developing financial bond with the customer. Introduction of Retention team is a move in the direction of social bond. However in order to make it really hard for the customer to switch they need to develop Structural bonds. This could be achieved through proactive strategy where they find ways to delight the customer.