The Impact of Matching between Service and Demand on Customer Churn: Evidence from Telecommunication Industry

Abstract

Abstract:

In this paper, we use customers’ consumption data and personalized marketing experiment of a telecommunication company to analyze the influence of matching between service and demand, customer engagement and service contract on customer churn. The empirical study finds that the degree of matching and customer engagement both have a significant negative relationship with customer churn. The service contract between the enterprise and the customer can effectively reduce the churn rate of customers within a certain period of time. After the contract expires, the churn rate increases, but still lower than that of customers not covered by the contract. And we also find through experimentation that personalized marketing based on the matching can significantly improve customer loyalty and business performance. The results of this paper provide theoretical guidance for enterprises to analyze customer churn, make decisions on customer retention and promote personalized marketing.

Key words: matching between service and demand, customer engagement, service contracts, customer churn

Li Ji, Zhang Shuai, Zhou Jing. The Impact of Matching between Service and Demand on Customer Churn: Evidence from Telecommunication Industry[J]. , 2020, 32(5): 192-204.

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