Eircell reduces churn by strengthening customer relationships

Published By eLoyalty

• Published July 2003
• 2 Page(s)

The Challenge
Eircell is Ireland's leading provider of mobile phone services. Part of the Eircom Group, it employs almost 1000 people. In the last three years, Eircell has increased its customer base by 600% to over a million people - one-third of the Irish population.

The company was one of the first European operators to allow customers to browse the Internet over a mobile phone. It was also among the first European networks to introduce a pre-paid service.

Eircell's 'Ready to Go' pre-pay service has been one of the most successful marketing launches in Ireland and recently received the Most Effective Marketing Campaign Award at the FT World Telecoms awards. But success brings problems of its own.

In the mobile phone space, annual churn rates are around 35%. And since most handsets are heavily subsidized and network access costs are swallowed, there is little or no Return On Investment (ROI) for the first two years. So customer losses mean both loss of revenue and investment.

Customers traditionally switch providers for either a more attractive rate or because of sub-standard service. As mobile phone service becomes more commodotized, service has become the way to make or break customer relationships.