Kagan: Churn Down if You Bundle Up

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Anaheim, Calif. -- New research numbers seemed to verify operators’ contentions that bundled services decrease churn.

According to data compiled by Kagan World Media and presented at the Western Show here, churn among digital customers now averages 5% per month. That’s a low for the three years Kagan has been tracking the count.

Among other products, monthly churn for telephony is 3.2%. Churn stands at about 2.6% monthly for either stand-alone basic cable or high-speed data.

Of those who churn, about 1.3 % per month are attributable to movers, according to the research. The percentage of people who cancel service out of "true product rejection" is actually very small, according to a Western Show presentation Thursday by Robin Flynn, senior vice president of Kagan Media Appraisals.

Data from Cox Communications Inc. -- the most aggressive supporter of "the bundle" -- demonstrated that offering’s "stickiness." Flynn said churn is as low as 1.3% per month with Cox’s multiproduct bundle, including telephone service.

During a general session Wednesday, Adelphia Communications Corp. chairman and CEO Bill Schleyer said video-customer churn is about 2% per month. Customers who buy video and data churn out at about 1.6% per month. And customers who buy those two products plus telephony churn out at only about 1.2% per month.

Operators are constantly looking for ways to retain customers because replacing them can be an expensive proposition. According to Kagan research, the cost of replacing each customer now runs at least $92. A breakdown showed that this figure includes $12 in back-office costs, $15 for marketing and $65 for truck rolls to new-install addresses.

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