From Leakage to Loyalty: How Telco CMOs Can Turn Churn into Growth

Churn is Costing Telcos a Lot

The global telecom industry is expecting growth to remain in the low single digits in the coming years.¹ According to Harvard Business Review, acquiring a new customer costs 5 to 25 times more than retaining an existing one.² This means every customer matters, as early churn erodes customer lifetime value (LTV), damages revenue projections, and undermines marketing ROI. 

For digital-first operators working in a market where no-contract offers are widely available, churn is a constant test of your value proposition at each billing cycle. CMOs are now under pressure to boost customer loyalty, reduce churn and boost LTV to defend their telco’s margin. 

Telcos have a wide variety of options to combat churn, and a lot of tactics employed by digital telco brands can be employed by legacy telcos that have implemented the right infrastructure.

With that said, here are some of the churn-fighting strategies that Circles has learned based on managing different digitally-native telco brands globally.

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Data: The Foundation of Churn Management

Effective churn management begins with visibility. Having well integrated customer intelligence helps telcos gather the right data in real time, powering proactive churn management initiatives and fixing the issues that lead to churn.

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Data as Infrastructure: A CVM-Led Architecture

Managing churn starts with a deep understanding of what customers are going through. This depth of understanding is built on a strong data foundation that is used for each brand.

Circles’ platform has been configured with tools for proactive and predictive churn management:

Customer Lifetime Value-Linked Decisioning

Retention matters as it directly affects a telco’s profitability. To better manage churn, Circles’ platform tracks churn-linked revenue loss across all user cohorts. This helps in identifying whether a departing customer is high-LTV or an inactive user, which lets teams trigger the right response such as incentives.

But apart from helping to determine the right response for each customer, LTV signals whether the products and bundles offered to customers provide real value or not. With the prevalence of no contract mobile plans today, it is easy for customers to switch to competitors if they believe that they are being shortchanged. 

This is where customer support teams come in. If somebody has shown signs of churning, the team can come in with various responses such as hearing them out, resolving dissatisfactions before they escalate, or providing them a new, personalized offer based on their usage behaviour. This approach has seen some success in improving LTV in some of Circles’ markets like Singapore.

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Proactive Initiatives Based on Real-Time Analytics

At Circles, this system is run by a dedicated customer value management team who is in charge of identifying the types of users who churn and their causes. Some of these insights include analyzing the value they have signed up for versus how much value they actually used.

Proactive churn management starts with tracking leading indicators such as:

This helps in identifying the points at which customers churn, including the potential reason for churning. One classic example of this is bill shock. When bill shock happens, people feel cheated as they pay more for what they believe they have signed up for.

Here’s one scenario where this can be avoided: Kirk sends out operational communications, and uses a lot of voice and data. Through automated playbooks, Kirk can be informed of his usage and receive upsell campaigns through SMS and emails to increase his connectivity quotas. This way, he will not be caught off guard with bill shock.

Here is what that SMS will look like:

Here is an example of an email reminder for Royston, who has almost hit his data usage limit:

Another example of a proactive initiative that boosted revenue was back when Circles first launched. Customers were asking for more data, smaller SMS bundles and unlimited calls. Circles.Life responded by introducing new plans which included more data and smaller customisable bundles for SMSes, unlimited incoming calls and more.

Circles.Life took customer feedback on product needs into account and launched corresponding products, which in this case was SMS bundles back in 2016 and 2017.

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Retention Tactics That Work: Transparency, Empathy, Automation

Beyond real-time data, branding and personalized outreach, there are three more learnings that we have seen that can reduce customer churn for telcos.

Transparency 

Customers should be empowered to easily find their solutions without the pain of manually consolidating or requesting information bit by bit. Providing sufficient information about plans and making troubleshooting information easily found by customers is one way to minimize the frustration they face and helps them solve their problems faster. 

Today’s generation is familiar with looking up information online to solve their problems. It was reported that telco customers in general waited more than double the time to speak to an adviser in 2020 than they did in 2019. But consumers are increasingly turning to chats or messaging platforms instead.³

This is supported with 24/7 digital customer support with self-servicability options which means zero waiting time and access to live chat with bots and human interaction if needed. On the digital app, FAQs and the telco website, plan terms are visible. These FAQs are constantly reviewed and updated. In addition, step-by-step how-to-videos are also readily available.

Automation 

Support should be speedy, smart, and scalable. Circles deploys AI-powered chatbots, real-time analytics as well as robotic process automation to help customers get always-on, up-to-date help. Vipin Sharma, Circles Head of Product Innovation shares:

“AI sits at the core of what we do, whether it’s customer segmentation, predictive churn analytics, or embedded lifestyle services, we help operators drive automation, personalization, and long-term revenue growth.”

As digital engagement deepens, customers are showing greater acceptance of self-service options, including chatbots. 60% of banking, insurance, and telco customers are willing to use an AI chatbot in at least one customer episode.⁴

We’re also working on digital assistants to amplify the effectiveness of human customer service agents and keep them up to date so they can provide customers with timely, well-informed help.

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Empathy 

Customers who have received a positive service experience and have confidence in their service provider are more likely to be loyal and less likely to churn.⁵

With that, any customer service interactions they have should be a chance to delight them, and that means avoiding situations where the customer feels like they are being treated as another task to fulfil a KPI.

Circles redefined its support metrics not just by time-to-resolution but also by depth of connection. Agents are trained to understand frustration as a signal, not a task. This pivot from KPI-chasing to relationship-building reduced churn across multiple markets.

Here’s a scenario to demonstrate what a customer delight mindset can look like:
Imagine that a customer requested an urgent SIM replacement.

With a traditional process-driven mindset, they could likely just stick with by-the-book instructions without exploring other available options:

This has process compliance, but doesn’t immediately address the customer’s concerns, failing to delight the customer.

With a customer delight mindset, the customer service agent will:

This mindset actively looks for alternatives the system can offer to proactively solve the client’s problem, resulting in customer delight and satisfaction while still being compliant to processes.

Following from the transparency pillar, customer service agents are also constantly kept up-to-date with key information to enable them to provide customers with timely responses. This can be done through initiatives like daily questionnaires about key information that customers regularly ask for along with gathering responses from agents for review at the end of each day.

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Getting The Right Audience: A Strong Brand Can Reduce Churn

It has been said that a strong brand makes customers more loyal. Ubiquitous brands like Coca-Cola and Apple have extremely loyal fanbases. 

This holds true for telcos as well. A 2013 study found that a strong brand image makes telco companies less vulnerable to change caused by low satisfaction.⁶

Digital telcos have the advantage of being able to target small but profitable customer niches. But at the same time, due to the similar nature of connectivity offers, brands need to do more to show how their experience is better. This is why as part of building new digital mobile operator brands, a clear value proposition framework needs to be built.

Priya explains:

“Everybody is giving abundant data in their mobile plans today, so how do you differentiate yourself when you're launching a new telco? It isn’t just about being digital first, but communicating why your digital experience is better.

This is why we focus on having a very strong value proposition to position each telco brand as a lifestyle brand based on what works for people in that market. For example, Mexico is heavily based on entertainment.”

Wim, a DMO brand in Mexico, offers Amazon Prime and Paramount+ as part of its entertainment packages. In Singapore, Circles.Life targets Digital Pioneers, a subsection of Digital Natives who power their digitally-engaged lifestyles with heavy data usage. Campaigns were built based on deep research into this segment that you can find here. You can also check out some of our campaigns here.

ONIC, in one part of the Middle East, identified that the digital natives valued the freedom to pick and choose what worked for them. The brand was built around this concept of freedom along with prepaid-style plans to emphasize that level of freedom. “Freedom as a brand attribute resonates very well with the local culture there.” Priya added.

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Loyalty Programs That Drive ROI: Circle of Joy, Life Boost, Circles AI

According to a BCG study, top-performing loyalty programs increase:

These loyalty programs should be run using the principles outlined above, tracking results and adjusting the program based on the outcomes observed. 

Instead of going with a ‘wholesale’ approach to the rewards being given, the loyalty rewards can be tweaked towards the rewards that customers respond best to. In that way, the rewards can be creative ways to ease pain points that originally have nothing to do with a mobile service, helping them see this offer as a smarter choice.

Circles.Life’s Circle of Joy loyalty program has a new option that turns bill payments into redeemable credits. Users can exchange accumulated points for $2 to $3 in monthly waivers making them a meaningful win for price-sensitive segments which are also seeing a lot of use.

The Circle of Joy loyalty program also includes lifestyle perks. Subscribers have been making a lot of requests for VPNs and travel insurance, so these have been added. Other lifestyle perks include 10 to 20% discounts across shopping, transport, entertainment, VPNs, and insurance services. Users can access up to $200 in monthly savings, even on entry-level plans.

Circles AI is another new perk that loyal subscribers have access to. Circles AI offers a generative AI assistant that enhances daily productivity, from summarizing documents to suggesting email responses. It is available even to base-tier subscribers, expanding perceived value beyond connectivity.

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Conclusion: From Campaigns to Continuity

For telco CMOs, churn prevention is readily available with the right teams, right software, and a principle to treat customers with care and empathy. The right tools will help you hear from your customers better, and react more quickly and effectively.

While technology has been advancing, treating loyal customers well still remains a winning strategy. But today’s tools will let you win their loyalty with data, personalization, and lifestyle alignment so that your customers know that you’ve got their back.

Circles’ digital-first approach, from CVM tools to loyalty programs like the Circle of Joy, are roadmaps that are continuing to unlock value for clients around the world.

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