IDEAS home Printed from https://ideas.repec.org/a/eee/telpol/v42y2018i3p212-226.html
   My bibliography  Save this article

Termination notice of mobile network operator customers after a tariff switch: An empirical study of postpaid subscribers in Germany

Author

Listed:
  • Gerpott, Torsten J.
  • Meinert, Phil

Abstract

Proactive subscriber churn management strategies of mobile network operators (MNOs) require that steps are taken to keep customers before they hand over a formal notice of termination to their provider. Therefore, several studies have analyzed how MNO customers who gave a termination announcement differ from individuals who did not communicate this message. However, no work has examined such differences among subscribers who recently switched to another tariff of their MNO. Therefore, this paper explores socio-demographic, service consumption and tariff change differences between contract cancellation “announcers” and “non-announcers” in a sample of 1810 postpaid customers who had changed their rate plan not long ago. Cancellation announcers were more likely to be males who decreased their mobile voice consumption after their tariff switch, had already attempted to churn in the past, had moved from an unmetered to a metered rate type, paid higher monthly bill amounts and received no discounts on their current rate plan that was introduced on the market some time ago. Among subscribers who gave a termination notice, early (late) cancellation announcers were more likely to be older (younger) customers with a growing (shrinking) SMS consumption after their tariff switch, had not attempted (had already tried) to leave their current MNO in the past, and were in a rate plan that was (not) recently introduced. The findings contribute to the literature on mobile customer retention and have implications for practitioners and scholars.

Suggested Citation

  • Gerpott, Torsten J. & Meinert, Phil, 2018. "Termination notice of mobile network operator customers after a tariff switch: An empirical study of postpaid subscribers in Germany," Telecommunications Policy, Elsevier, vol. 42(3), pages 212-226.
    • Handle: RePEc:eee:telpol:v:42:y:2018:i:3:p:212-226
    DOI: 10.1016/j.telpol.2017.11.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0308596117303336
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.telpol.2017.11.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Myengja Yang, 2013. "Churn Management and Policy: Measuring the Effectiveness of Fixed-Mobile Bundling on Mobile Subscriber Retention," Journal of Media Economics, Taylor & Francis Journals, vol. 26(4), pages 170-185, December.
    2. Czajkowski, Mikołaj & Sobolewski, Maciej, 2016. "How much do switching costs and local network effects contribute to consumer lock-in in mobile telephony?," Telecommunications Policy, Elsevier, vol. 40(9), pages 855-869.
    3. Kim, Hee-Su & Kwon, Namhoon, 2003. "The advantage of network size in acquiring new subscribers: a conditional logit analysis of the Korean mobile telephony market," Information Economics and Policy, Elsevier, vol. 15(1), pages 17-33, March.
    4. Haenlein, Michael, 2013. "Social interactions in customer churn decisions: The impact of relationship directionality," International Journal of Research in Marketing, Elsevier, vol. 30(3), pages 236-248.
    5. Friesen, Lana & Earl, Peter E., 2015. "Multipart tariffs and bounded rationality: An experimental analysis of mobile phone plan choices," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 239-253.
    6. Venkatesh, Viswanath & Morris, Michael G. & Ackerman, Phillip L., 2000. "A Longitudinal Field Investigation of Gender Differences in Individual Technology Adoption Decision-Making Processes," Organizational Behavior and Human Decision Processes, Elsevier, vol. 83(1), pages 33-60, September.
    7. Raghuram Iyengar & Kamel Jedidi & Skander Essegaier & Peter J. Danaher, 2011. "The Impact of Tariff Structure on Customer Retention, Usage, and Profitability of Access Services," Marketing Science, INFORMS, vol. 30(5), pages 820-836, September.
    8. Wong, Ken Kwong-Kay, 2010. "Should wireless carriers protect residential voice subscribers from high overage and underage charges? Insights from the Canadian telecommunications market," Telecommunications Policy, Elsevier, vol. 34(8), pages 461-481, September.
    9. Seo, DongBack & Ranganathan, C. & Babad, Yair, 0. "Two-level model of customer retention in the US mobile telecommunications service market," Telecommunications Policy, Elsevier, vol. 32(3-4), pages 182-196, April.
    10. Taipale, Sakari, 2013. "The use of e-government services and the Internet: The role of socio-demographic, economic and geographical predictors," Telecommunications Policy, Elsevier, vol. 37(4), pages 413-422.
    11. Ahn, Jae-Hyeon & Han, Sang-Pil & Lee, Yung-Seop, 0. "Customer churn analysis: Churn determinants and mediation effects of partial defection in the Korean mobile telecommunications service industry," Telecommunications Policy, Elsevier, vol. 30(10-11), pages 552-568, November.
    12. Peter D., Lunn & Sean, Lyons, 2017. "Consumer switching intentions for telecoms services: evidence from Ireland," MPRA Paper 77412, University Library of Munich, Germany.
    13. Srinuan, Pratompong & Srinuan, Chalita & Bohlin, Erik, 2014. "An empirical analysis of multiple services and choices of consumer in the Swedish telecommunications market," Telecommunications Policy, Elsevier, vol. 38(5), pages 449-459.
    14. Polo, Yolanda & Sese, F. Javier & Verhoef, Peter C., 2011. "The Effect of Pricing and Advertising on Customer Retention in a Liberalizing Market," Journal of Interactive Marketing, Elsevier, vol. 25(4), pages 201-214.
    15. Kim, Hee-Su & Yoon, Choong-Han, 0. "Determinants of subscriber churn and customer loyalty in the Korean mobile telephony market," Telecommunications Policy, Elsevier, vol. 28(9-10), pages 751-765, October.
    16. Wirtz, Jochen & Xiao, Ping & Chiang, Jeongwen & Malhotra, Naresh, 2014. "Contrasting the Drivers of Switching Intent and Switching Behavior in Contractual Service Settings," Journal of Retailing, Elsevier, vol. 90(4), pages 463-480.
    17. E Lima & C Mues & B Baesens, 2009. "Domain knowledge integration in data mining using decision tables: case studies in churn prediction," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(8), pages 1096-1106, August.
    18. Sulaimon Olanrewaju Adebiyi & Emmanuel Olateju Oyatoye & Bilqis Bolanle Amole, 2015. "Determinants of Customers` Churn Decision in the Nigeria Telecommunication Industry: An Analytic Hierarchy Process Approach," The International Journal of Economic Behavior - IJEB, Faculty of Business and Administration, University of Bucharest, vol. 5(1), pages 81-104, December.
    19. Lemmens, A. & Croux, C., 2006. "Bagging and boosting classification trees to predict churn," Other publications TiSEM d5cb664d-5859-44db-a621-e, Tilburg University, School of Economics and Management.
    20. Sissel Jensen, 2006. "Implementation of competitive nonlinear pricing: tariffs with inclusive consumption," Review of Economic Design, Springer;Society for Economic Design, vol. 10(1), pages 9-29, April.
    21. Ruth N. Bolton, 1998. "A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction," Marketing Science, INFORMS, vol. 17(1), pages 45-65.
    22. Chuang, Yi-Fei, 2011. "Pull-and-suck effects in Taiwan mobile phone subscribers switching intentions," Telecommunications Policy, Elsevier, vol. 35(2), pages 128-140, March.
    23. Keramati, Abbas & Ardabili, Seyed M.S., 2011. "Churn analysis for an Iranian mobile operator," Telecommunications Policy, Elsevier, vol. 35(4), pages 344-356, May.
    24. Benjamin Oghojafor & Godson Mesike & Rasaki Bakarea & Charles Omoera & Ismaila Adeleke, 2012. "Discriminant Analysis of Factors Affecting Telecoms Customer Churn," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 3(2), pages 59-67, March.
    25. Gerpott, Torsten J. & Ahmadi, Nima & Weimar, Daniel, 2015. "Who is (not) convinced to withdraw a contract termination announcement? – A discriminant analysis of mobile communications customers in Germany," Telecommunications Policy, Elsevier, vol. 39(1), pages 38-52.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jin, Haofeng, 2022. "The effect of overspending on tariff choices and customer churn: Evidence from mobile plan choices," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    2. Hagebölling, Mona & Seegebarth, Barbara & Woisetschläger, David M., 2021. "Tactical termination of contractual services – An analysis of the phenomenon and its determinants," Journal of Business Research, Elsevier, vol. 137(C), pages 170-181.
    3. Calzada, Joan & García-Mariñoso, Begoña & Suárez, David, 2023. "Do telecommunications prices depend on consumer engagement?," Information Economics and Policy, Elsevier, vol. 62(C).
    4. García-Mariñoso, Begoña & Suárez, David, 2019. "Switching mobile operators: Evidence about consumers’ behavior from a longitudinal survey," Telecommunications Policy, Elsevier, vol. 43(5), pages 426-433.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gerpott, Torsten J. & Ahmadi, Nima & Weimar, Daniel, 2015. "Who is (not) convinced to withdraw a contract termination announcement? – A discriminant analysis of mobile communications customers in Germany," Telecommunications Policy, Elsevier, vol. 39(1), pages 38-52.
    2. García-Mariñoso, Begoña & Suárez, David, 2019. "Switching mobile operators: Evidence about consumers’ behavior from a longitudinal survey," Telecommunications Policy, Elsevier, vol. 43(5), pages 426-433.
    3. Uner, M.Mithat & Guven, Faruk & Cavusgil, S.Tamer, 2020. "Churn and loyalty behavior of Turkish digital natives: Empirical insights and managerial implications," Telecommunications Policy, Elsevier, vol. 44(4).
    4. Capponi, Giovanna & Corrocher, Nicoletta & Zirulia, Lorenzo, 2021. "Personalized pricing for customer retention: Theory and evidence from mobile communication," Telecommunications Policy, Elsevier, vol. 45(1).
    5. Guven, Faruk, 2018. "Churn and loyalty behaviour of Turkish digital natives," 29th European Regional ITS Conference, Trento 2018 184943, International Telecommunications Society (ITS).
    6. Hagebölling, Mona & Seegebarth, Barbara & Woisetschläger, David M., 2021. "Tactical termination of contractual services – An analysis of the phenomenon and its determinants," Journal of Business Research, Elsevier, vol. 137(C), pages 170-181.
    7. Karjaluoto, Heikki & Jayawardhena, Chanaka & Leppäniemi, Matti & Pihlström, Minna, 2012. "How value and trust influence loyalty in wireless telecommunications industry," Telecommunications Policy, Elsevier, vol. 36(8), pages 636-649.
    8. Ken Kwong-Kay Wong, 2009. "Fighting churn with rate plan right-sizing: a customer retention strategy for the wireless telecommunications industry," The Service Industries Journal, Taylor & Francis Journals, vol. 30(13), pages 2261-2271, August.
    9. Jin, Haofeng, 2022. "The effect of overspending on tariff choices and customer churn: Evidence from mobile plan choices," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    10. Luis Miranda-Gumucio & Ignacio Gil-Pechuán & Daniel Palacios-Marqués, 2013. "An exploratory study of the determinants of switching and loyalty in prepaid cell phone users. An application of concept mapping," Service Business, Springer;Pan-Pacific Business Association, vol. 7(4), pages 603-622, December.
    11. Srinuan, Pratompong & Srinuan, Chalita & Bohlin, Erik, 2014. "An empirical analysis of multiple services and choices of consumer in the Swedish telecommunications market," Telecommunications Policy, Elsevier, vol. 38(5), pages 449-459.
    12. Griffin, Míde & Lyons, Sean & Mohan, Gretta & Joseph, Merin & Domhnaill, Ciarán Mac & Evans, John, 2022. "Intra-operator mobile plan switching: Evidence from linked survey and billing microdata," Telecommunications Policy, Elsevier, vol. 46(7).
    13. Thomas Cadet & Sophie Larribeau & Thierry Pénard, 2012. "Network effects, Customer Satisfaction and Recommendation on the Mobile Phone Market," Economics Working Paper Archive (University of Rennes & University of Caen) 201242, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    14. Tianyuan Zhang & Sérgio Moro & Ricardo F. Ramos, 2022. "A Data-Driven Approach to Improve Customer Churn Prediction Based on Telecom Customer Segmentation," Future Internet, MDPI, vol. 14(3), pages 1-19, March.
    15. Sobolewski, Maciej & Kopczewski, Tomasz, 2017. "Estimating demand for fixed-line telecommunication bundles," Telecommunications Policy, Elsevier, vol. 41(4), pages 227-241.
    16. Kocaman, Barış & Gelper, Sarah & Langerak, Fred, 2023. "Till the cloud do us part: Technological disruption and brand retention in the enterprise software industry," International Journal of Research in Marketing, Elsevier, vol. 40(2), pages 316-341.
    17. Kim, Moon-Koo & Park, Myeong-Cheol & Lee, Duk Hee & Park, Jong-Hyun, 2017. "Determinants of the subscription to bundled services and their effect on customer retention in the Korean communications sector," 14th ITS Asia-Pacific Regional Conference, Kyoto 2017: Mapping ICT into Transformation for the Next Information Society 168501, International Telecommunications Society (ITS).
    18. Usero Sánchez, Belén & Asimakopoulos, Grigorios, 2012. "Regulation and competition in the European mobile communications industry: An examination of the implementation of mobile number portability," Telecommunications Policy, Elsevier, vol. 36(3), pages 187-196.
    19. Kim, Moon-Koo & Park, Myeong-Cheol & Lee, Duk Hee & Park, Jong-Hyun, 2019. "Determinants of subscriptions to communications service bundles and their effects on customer retention in Korea," Telecommunications Policy, Elsevier, vol. 43(9).
    20. Ballings, Michel & Van den Poel, Dirk, 2015. "CRM in social media: Predicting increases in Facebook usage frequency," European Journal of Operational Research, Elsevier, vol. 244(1), pages 248-260.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:42:y:2018:i:3:p:212-226. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.