Southern Communication Case Report

Southern Communications Case Report # 2

Annie Lee, Timilehin Fademi, Katherine Knudsen, and Huang Wei-Han

Metropolitan State University

MIS 600 50: Management Information Systems

Professor Queen Booker

06/08/2022
Southern Communication Case Report

Churn

Churn is the rate at which customers stop doing business with a company over a given

period of time. The higher your churn rate is, the more customers stop buying from your

business. Generally, collecting and analyzing churn data is vital as it helps identify dissatisfied

customers and inform management of reasons for not meeting their requirements. In addition, the

interpreted data report will assist in developing strategies/proffer solutions to identified issues

leading to customers leaving a platform and improving the customer service experience.

The analysis of customer churn rates is important to STC because, like any business, it is

important to keep improving in order to retain your customers and increase revenue. Once STC

understands the churn rates, the most common reasons for customer churn, and what segments of

the customer base have the highest churn, they can better target where to invest in new or

improved technology and innovation.

Within Southern Region A, SCC made some improvements from last year. Fewer people

left in many of the reasons, but the ones that stand out and decreased by 1,000 or more responses

are the following: competitor made better offer, competitor offer higher download speeds, don’t

know, lack of affordable download/upload speed, lack of self-service on website, limited range

of services, long distance charges, and moved.

Data Analysis

A table that lists the reasons for the churn in 2020 and 2021 is below, which will allow us to analyze the
reasons for the churns, where our metrics have improved, and where we need to focus our resources.

Responses Improved(better) or Needs to

Churn Reason 2020 submitted 2020 2021 Improve (needs)
Attitude of service provider 1031 1439 Needs -408
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Attitude of support person 1755 2755 Needs 1000

Competitor had better devices 1081 1387 Needs -306

Competitor made better offer 3987 1456 Better 2531

Competitor offered higher 1207

download speeds 2951 1744 Better

Competitor offered more data 1001 1013 Needs -12

Deceased 671 1669 Needs -998

Don't know 1890 860 Better 1030

Extra data charges 2018 1092 Better 926

Lack of affordable 1000

download/upload speed 1408 408 Better

Lack of self-service on Website 2561 560 Better 2001

Limited range of services 1627 528 Better 1099

Long distance charges 3120 1130 Better 1990

Moved 2198 1134 Better 1064

Network reliability 2713 1744 Better 969

Poor expertise of online support 311 210 Better 101

Poor expertise of phone support 298 234 Better 64

Price too high 918 1008 Needs -90

Product dissatisfaction 2001 1228 Better 773

Service dissatisfaction 1931 977 Better 954

For our purposes the reasons customers churn (above) will be divided into 3 categories:
Technology based:

Churn Reason 2020 Responses submitted 2020 2021

Competitor had better devices 1081 1387
Competitor offered higher download speeds 2951 1744
Competitor offered more data 1001 1013
Competitor made better offer 3987 1456
Extra data charges 2018 1092
Lack of affordable download/upload speed 1408 408
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Lack of self-service on Website 2561 560

Limited range of services 1627 528
Long distance charges 3120 1130
Network reliability 2713 1744
Product dissatisfaction 2001 1228
Price too high 918 1008

People based:

Churn Reason 2020 Responses submitted 2020 2021

Attitude of service provider 1031 1439
Attitude of support person 1755 2755
Poor expertise of online support 311 210
Poor expertise of phone support 298 234
Service dissatisfaction 1931 977

Out of scope

Churn Reason 2020 Responses submitted 2020 2021

Deceased 671 1669
Don't know 1890 860
Moved 2198 1134

When looking at the data it is clear that the vast majority of improvements in the churn rate made by
STC has been in the technology dimension of our business. Out of the 12 technology based churn
reasons, 9 have improved. The problem areas are: Competitors offered more data, competitors had
better devices; and the price was too high.

Of the 5 churn elements in the people category: 2 need improvements: Attitude of service providers and
support persons. The three out of scope elements do not factor into our improvement plan.

When looking at churn rates by zip code, it is evident that the installation of DSL in customer homes has
a large impact on the churn rate. Three of the four zip codes with the highest churn rates, over 30% of
customers, had DSL.

70127 34.74% DSL

70128 33.80% DSL

70131 33.83% DSL

70452 31.65% BROADBAND

 In Zip code 70127 we had 2590 of 7,455 customers churn in 2021; of those customers 1,327
churned for one of the 12 identified technology reasons.
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 In Zip code 70128 we had 3,626 of 10,728 customers churn in 2021; of those customers 2,160
churned for one of the 12 identified technology reasons.
 In Zip code 70131 we had 1731 of 5,117 customers churn in 2021; of those customers 1,155
churned for one of the 12 identified technology reasons.
 In Zip code 70452 we had 1739 of 5,494 customers churn in 2021; of those customers 1,443
churned for one of the 12 identified technology reasons.

The churn rate can also be analyzed via demographics. Here are the demographics measured by STC:

Total customers: 97,894

 Female customers:
o 48,638/97894 (49.7%) total;
o 11,464/48,638 (23.6%) churned;
o 6717/48,638 (13.8%) churned for reasons related to technology
 Male customers:
o 49256/97894 (50.3%) total;
o 11,112/49256 (22.6%) churned;
o 6581/49256 (13.4%) churned for reasons related to technology
 Senior customers:
o 13954/97894 (14.3%) total;
o 5456/13954 (39.1%) churned;
o 3440/13954 (24.7%) churned for reasons related to technology
 Not senior customers:
o 83940/97894 (85.7%) total;
o 17,120/83940 (20.4%) churned;
o 9858/83940 (11.7%) churned for reasons related to technology
 Asian customers:
o 510/97894 (.52%) total ;
o 202/510 (39.6%) churned ;
o 126/510 (24.7%) churned for reasons related to technology
 Black customers:
o 65,219/97894 (66.6%) total ;
o 17,024/65,219 (26.1%) churned ;
o 10,243/65,219 (15.7%) churned for reasons related to technology
 Hispanic customers:
o 9,987/97894 (10.2%) total ;
o 1387/9987 (13.9%) churned ;
o 747/9987 (.74%) churned for reasons related to technology
 Multi-racial customers:
o 214/97894 (.22%) total;
o 33/214 (15.4%) churned;
o 12/214 (5.6%) churned for reasons related to technology
 Native American customers:
o 336/97894 (.34%) total;
o 142/336(42.3%) churned;
o 20/142 (14.1%) churned for reasons related to technology
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 White customers:
o 21,428/97894 (21.9%) total;
o 3659/21428 (17.1%) churned;
o 2229/21428 (10.4%) churned for reasons related to technology
 Unknown:
o 290/97894 (.3%) total;
o 129/290 (44.5%) churned;
o 21/290 (7.2%) churned for reasons related to technology

The most concerning elements of the patterns revealed by the demographics are demonstrated when
analyzing the churn rates for reasons related to technology, which constitutes more than half of the
reasons for churn in nearly all demographics.

The churn rates can also be analyzed by looking at the churn rates based on types of service.

 Phone Service: 22.68%: 20,296/89,500

 Multiple Lines: 25.81%: 9946/38538
 Internet Service: 31.82%: 21,102/66,320
 Streaming TV: 30.29%: 9888/32646
 Streaming Movies: 29.26%: 9432/32230
 Device Protection: 15.94%: 7182/45050
 Tech Support: 11.00%: 4466/40618

When looking at the churn rates for the different services, it is clear that the internet service and
streaming TV services offered by STC have significant churn when compared with other services offered.
Investment in improving the Internet and Streaming services provided by STC could improve customer
retention.
Although there are concerning elements in the data points presented above, STC had an approximately
15% decrease in the customer churn rate from 38.90% in 2020 down to 23.06% in 2021. The churn rate
goal for 2021 is to decrease the customer churn rate by 7%, so our target is a churn rate of 14%. With
the data discussed we will focus on improving our business in the key areas discussed below, as well as
maintaining our competitive pricing model.

Southern Region A Issues

One area where Southern Region A has significantly improved is in the “competitor

made better offer” section. The churn rate for this metric has significantly improved in 2021 over

2020. In 2020, the number of submitted responses was 3,987, but now in 2021, it is down to

1,456; STC has implemented competitive pricing models for their services in their areas of the

market, and the numbers reflect that.

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There are several areas that need improvement and have devolved since 2020, but our

focus needs to be on improving the churn rate based on technology. The most commonly cited

reasons for such churn are “competitor had better devices” and “competitor offered more data”;

the services that had the largest churn are internet and streaming services. Investment in

improving internet service delivery to customers should also improve the churn for streaming

services, since streaming satisfaction is often tied to how well the internet functions. That leads

into the next area of focus, the hardware available to customers in certain locations.

Three of the four zip codes with the highest churn rate have DSL rather than Broadband

hardware installed in their homes. STC should make investments in these communities to expand

customer access to broadband. Such an investment would be expensive at the outset but should

balance over time as the churn rate in these communities decreases and the customer base

increases. In addition to increased investment in infrastructure in targeted areas, STC should also

increase their investment in device innovation. A larger number of our customers left the service

in 2021 vs. 2020 because our competitors offered better devices. One of the risks of increased

investments in device innovation and infrastructure is that it could lead to profit loss and price

increases in the short term.