ARCchart on churn and financial services

ARCchart, the telecoms analysis firm, has an interesting article about the link between churn rates and subscriber acquisition cost (SAC) in various markets. Citing the example of Vodafone’s activities in several European countries, ARCchart arrives at the entirely logical conclusion that SAC rises with an increased churn rate.

The article goes on to examine the potential for increased churn in Japan when number portability is introduced in the near future. ARCchart applauds NTT DoCoMo’s strategy of linking financial services into its mobile service through the FeliCa mobile payments platform and its strategy of taking stakes in credit card companies.

Financial services have very low churn rates in comparison to mobile telecoms (according to ARCchart, Vodafone must re-acquire 30 percent – some 4.3m people – of its UK customer base every year just to maintain its current market share). DoCoMo’s move to tie customer’s financial payment methods into their mobile account could be the most effective way for it to mitigate churn when number portability arrives. If it can achieve a trusted relationship with its subscribers on the financial level, it will provide a significant competitive advantage.

Read the full article here.

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