Customer Billing Satisfaction Linked to Churn, TM Forum Study Shows

Customer satisfaction with telecom billing systems, especially for mobile services, is a key to customer loss rates, according to the results of the latest TM Forum Business Benchmarking study, released this week at Management World 2008 World in Nice, France.

The telco benchmarking data show a large gap between the top and average billing inquiry rates among service providers. Average performers logged 16.21 percent of inquiries as billing-related while leading companies reported billing inquiries at 1 percent of all inquiries. Significantly, good performers in this area show lower customer loss rates with less effective performers showing high loss rates.

“Since the largest cause of customer services calls for mobile subscribers is for billing- related issues, investments in streamlined billing plans and multiple-play plans can generate a good rate of return,” the report noted.

The study, "Building on Success: Investment Opportunities in Changing Times," was produced for TM Forum by OSS Observer and included input from more than 40 communications service providers from Central and Western Europe, Asia-Pacific, North and Latin America. The poll has been conducted each spring and fall over the past three years.

The TM Forum Business Benchmarking results show a widening gap between communications service providers with the best and the worst churn rates. In fourth quarter 2005, the providers with the worst churn rates (2.81 percent) had nearly three times the churn as providers with the best churn rates (.94 percent). In second quarter 2007, providers with the worst rates (3.7 percent) had 5.5 times the churn as those with the best rates (.67 percent).

“To retain and acquire customers [communications service providers] must continue to pursue improvements in operations: service delivery and customer management,” the report added.

Benchmarking data show leading service providers deliver orders in seven days or less 99 percent of the time and need to rework those orders less than 10 percent of the time. Further, the investment in processes leads to an average resolution by leaders in less than one hour.

“Clearly customer satisfaction, and therefore the revenue opportunities for additional services, is related to this high level of performance at service delivery. Investment in mature process development at the onset of service offerings is much less expensive than fixing a process once fielded,” the report stated.