Customer churn and growth of multichoice kenya limited

Abstract

The present competitive world market where the customer is the main reason for selling has created high level of competition among firms to win clients over their competitors.The pay TV market in Kenya was long monopolized by MCK. However, the market has since changed as more and more pay TV companies launched their services in Kenya. The purpose of this study was to establish the effects of customer churn on growth of Multichoice Kenya Limited.The objective of this study is to:establishing the extent of customer churn at MCK Limited and determining the effect of customer churn on growth at MCK Limited.The study adopted a case study design because the unit of analysis is on organization (MCK).The target population was the management team which had 8 members.The study used both primary and secondary data.Primary data was collected using an interview guide while secondary data was collected from operation department churn reports and other publications at MCK.The secondary data covered a period of five years starting 2009 to 2014.Content analysis was used to analyze the data collected from the respondents since it was qualitative in nature.After analysis, a report was then generated to show the competitive strategies adapted by MCK Limited to serve the Kenyan pay TV market.On causes of customer disconnections, various reasons were identified; Lack of funds in customer accounts, system error where by the system automatically disconnect the account, billing issues were also identified as cause of disconnection and also customer paying in wrong accounts and leaving their own account with no funds. On the strategies that MCK has used to reduce the number of customers terminating their services,out bound calls and SMS have been used to remind customers of their subscription due date. On the mechanisms that MCK has put in place to deal with dissatisfied customers, the company has established call centers that specifically deals with dissatisfied customers. Customer disconnection affected MCK growth in a negative way. The disconnections of accounts due to no renewal of subscription resulted to loss of revenue.MCK main souce of revenue is on subscription.Disconnection of a customer account therefore drastically reduces MCK revenue.The following conclusions were made from the study.Lack of funds in customer accounts, system error where by the system automatically disconnects a customer account, billing issues and paying in wrong accounts and leaving their own account with no funds are the causes of disconnection.Strategies that MCK had used to reduce the number of customers terminating their services are out bound calls and SMS to remind customers of their subscription due date. MCK had put mechanisms in place to deal with dissatisfied customers, the company has established call centers that specifically deals with dissatisfied customers. Trained staff are placed strategically in these centers so as to deal with and resolve issues that arise from the products and services offered by MCK Limited. The study recommends that the company should continue to address the issue of customer churn. This is because customers are key in the continuity and performance of the organization. It was noted that customer defection and disconnections have increased drastically over the past five years and that profitability has been growing at a declining rate. The study further recommends that the management avails necessary and adequate resources to manage the issue of customer churn. This encompassed training of all staff both front and back office on customer service so as to achieve harmony in service delivery.