About a year ago I heard that subscriber churn for service providers have been increasing at a steady rate of 5% per year with the current rate exceeding 20%. (Source: European Commission 2008, Wireless Intelligence 2008, A.T. Kearney analysis.). This was interesting to me since I also was hearing from our Microsoft Exchange partners, that their churn was decreasing. I wanted to learn more why our partners were telling us something opposite of the industry trend, and theorized that Microsoft Exchange’s business class email solutions might be causing stickiness and retention. So I commissioned Edge Strategies to run a study to understand the impact of Business Class Email on Small Business broadband churn over a 3 year period to learn more. There were some very interesting results, so we decided to share them with our partners this week (download full white paper). Here are some of the key findings:
- Web mail users switch their broadband provider 37% above average
- Hosted Business Class Email users switch their broadband provider 31% below average
- SMBs switch broadband providers 17% for additional services such as Business Email
- POP/Webmail Users are more likely to switch providers due to broadband cost
- Hosted Business Class Email Service users are less likely to switch providers due to price vs. POP/Web mail. They are more likely to switch based on Service Quality and higher Broadband speeds vs. POP/Webmail users.
I’ve highlighted individual Business email retention case studies before, but this is our first market study to quantify this. See the following for previous churn/bundle discussions:
- Sticky Like Honey and Just as Yummy!
- Bundle Bundle if you can, or you might lose your customer to Deutschland-LAN
– Alex Danyluk