Analyzing Consumer Churn in the Rural Indian Bop: Can the Price Sensitive Customer Be Turned Loyal?

Abstract

Indian telecommunication companies have traditionally looked to retain the urban customers, which contribute significantly to the revenues and help improve the company‟s top-line. India still has a relatively untapped rural market. Companies are looking at rolling out services and applications specific to the rural segment to increase their bottom-line, but not enough effort is towards retaining these users. Despite the development of specific content in the VAS arena for the BoP, there are still no signs for an alternative service delivery framework for the BoP consumer, known to keep multiple SIM cards, changing them at will or discarding a number for a newer tariff plan or offer.Companies are steadily looking at implementing systems for improving consumer experience and control churn for urban consumers but information about a similar mechanism for the rural BoP users is not widely available. As usage in the BoP increases, coupled with the potential of this segment to move upwards in the pyramid, the retention of consumers in the BoP can prove to be a winning strategy in the long term for the telecommunication companies.This research focuses on determining the major reasons why BoP users leave a particular service provider. This research tries to study the rural BoP users to better understand their buying influences, their tenure on the service provider‟s network and their voice and VAS usage. This research also aims to highlight key issues that may help in better recommendations to telecommunication service providers and policy formulations for rural areas in India. This research aims to mark key indicators for the companies to see business sense in this opportunity to serve the rural BoP, which in turn would increase the overall economic scenario of the country as rise of 10 mobile phones per 100 people in a typical developing country like India, could boost GDP growth by 0.6 percentage points.