A letter on customer defection

Fibre Optics

Todays post is taken from a very interesting letter in the Financial Times that talks about customer defection, and the impending broadband price war.

“Sir, The incumbent providers of broadband internet should indeed be quaking in their boots (“Carphone Warehouse sparks broadband war”, April 12). This is particularly the case given the mobility of modern consumers, many of whom are comfortable about changing suppliers about as often as they change their socks.

We commissioned research last year that bears closely on the issue. The study looked at annual customer “defection” rates for different industries. The awful news is that the majority are on the rise. Whereas a couple of years ago only 16 per cent of customers switched suppliers each year, this has now risen to 19 per cent. But for internet service providers (in other words, the broadband industry), the picture is rather gloomier than the average, with 24 per cent of customers defecting annually.

Things could be worse – the mobile phone industry experienced an average 33 per cent defection rate last year. But such comparisons make cold comfort for broadband suppliers. Expect a serious shake-up in the industry.

Andrew Greenyer,
Director of Marketing EMEA,
Group 1 Software Europe,
Watford, Herts WD18 8UE”

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