8 Obvious and Not-So-Obvious Ways to Reduce Churn as an MVNO

There’s no use trying to fill up a bathtub when the drain is open. Similarly, there’s little use in attempting to acquire large numbers of customers as an MVNO when your churn is out of control. So, let’s review some obvious and less obvious ways that an MVNO can go about reducing their churn. If you are providing mobile service and your monthly churn exceeds 6-8%, I recommend that you treat the following as a checklist. Work through these items one-by-one and watch your churn rate plummet, saving you precious marketing dollars.

Before getting into the list, be sure you have the absolute basics in place: you provide a reliable mobile service, with good visibility into usage and billing, and your customer service is solid at minimum. (As an MVNO, the importance of a solid customer experience cannot be overestimated. It is one of those precious ways that you can differentiate yourself in a crowded market.) Once these basics are in place, I recommend you focus on the following eight ways to reduce churn as an MVNO.

Obvious Ways to Reduce Churn

1. Provide Devices (with Payment Plans)

Perhaps the most straightforward way to keep a customer captive is by selling them a high-dollar device with a payment plan that prevents them from porting their number until the device is paid off. While it may be enticing to simplify inventory management and operations by providing “SIM only,” full-suite device programs designed for MVNOs are beginning to emerge. These programs give MVNOs access to devices without the need to purchase a large quantity of inventory upfront and make it easier than ever to sell phones to customers.

2. Put Customers on Contracts

Five years ago, it was an effective marketing tactic to guarantee “no contracts”. Prepaid mobile providers touted flexibility so that customers didn’t feel locked into their provider, and it worked. It was about freedom and choice. As MVNO economics have normalized, it is increasingly attractive for customers to agree to contracts to unlock lower monthly prices. From the MVNO’s perspective, it’s enticing to be able to model the minimum value of a customer when you know you’ll collect at least 3-, 6-, or 12-months’ worth of revenue.

3. Be Transparent About Rates

Unexpected rate hikes should be avoided at all costs. If you need to drive additional recurring revenue, look for other value-added services you can provide, or put new acquisitions on higher priced plans. At the risk of being hyperbolic, there is an argument to be made that most of the consumer distrust of telecommunications companies in the US results from confusing billing mechanisms and rate increases. These leave the customer unable to decipher why after two years of being a loyal customer, they’re paying double what they had originally expected. It’s a recipe for increased churn.

4. Allow for as Much Self Service as Possible

Reduce the friction associated with speaking to a representative (AI or human) and enable the customer to make changes through their subscriber portal themselves. The customer should be able to add lines, change their plan, purchase top-ups, and update their payment information on their own. Of course, this must be enabled by a technology solution, and may require some investment in the development to make it happen. I would argue that the upfront investment in your technology will be well worth it in the long run to reduce customer churn and (as a bonus) reduce customer service costs.

Less Obvious Ways to Reduce Churn

5. Improve Lead Quality

This may be counterintuitive, but if you are an MVNO with a target audience, you should NOT try to sell to everyone. Whether discovered through vague messaging or lack of targeting, placing a customer on your network who may not derive real, differentiated value from your brand, is, in a way, asking for a churned customer. For example, if you acquire a customer based on your “low prices and zero commitment” or your “exceptional customer service,” think about what will happen when the MVNO next door uses the same marketing tactics. That customer just might jump ship for a slightly better deal. Instead, use tailored, targeted messaging and targeting to put customers on your service who will truly be a great fit.

6. Give Customers Access to Perks (That They Care About)

Consider instating “loyalty points,” or some version thereof, that reward a customer for sticking around. To take it a step further: What are your target customer’s pain points that have nothing to do with their mobile service? What are creative ways that you could ease those pain points? (Consider supplementary business segments or strategic partnership.) This method of thinking should be the bread and butter of an MVNO, and what the team is always orienting towards. “How can we provide more value to our customers to create loyalty to our brand and service?”

7. Talk About the Brand Mission

I suppose this point should begin with having a clearly defined brand mission. Once solidified, I highly recommend nurturing campaigns set up via multiple channels (email and socials) that speak directly to whatever it is your company stands for. Help customers understand why they should be proud to be part of your brand’s story, which is making an impact in the world. If you can do this well, you will find that customers overlook minor challenges in their experience and stick around longer.

8. Instate a Referral Program

In my mind, this piggy backs directly off the last point. If you can construct a core customer base that believes in your mission and subscribes to your messaging, you can create a referral engine for yourself without spending a single marketing dollar. Give customers a kickback in some form for referring others to your service, ideally one that is meaningful, and you just might unlock a new method of customer acquisition with incredibly low churn rates. After all, we’re far more likely to trust the recommendation we get from a friend than we are to trust a recommendation you get from the wild world of the internet.

For an MVNO, having a handle on your churn and keeping it as low as possible will preserve the integrity of your entire operation. Instead of leaking customers and sinking the ship, consider implementing these tactics to keep customers on your service for the long run.