About E-vergent Wireless
E-vergent uses a combination of Cambium and Ubiquiti equipment along with Billmax as their billing platform. Preseem’s API integration with Billmax gives E-vergent easy access to subscriber plan speeds for bandwidth enforcement.
As we’ll see in this case study, the combination of Preseem’s ability to identify parts of the network that required upgrades and our QoE optimized plan enforcement has resulted in a 28% drop in churn, which translated into retaining $27,000 in revenue and 63 customers (representing 297 service months) in a six-month span. Predicting into the future, this lower churn rate means retaining $114,000 in revenue and 126 customers (or 1,259 service months) over a one-year period. Most importantly, e-vergent is now growing again! Let’s take a closer look at subscriber churn and how your organization can reverse or prevent it.
The (Negative) Power of Churn
It’s obvious that losing customers is bad. What’s less obvious is the compounding negative effect that churn has on your business. It’s like investment income in reverse! A simple example:
- 1000 subscribers
- 1.5% monthly churn
- $75 average monthly revenue per user (ARPU)
In this simple scenario, the WISP will be down to 834 subscribers at the end of 12 months and will have lost almost $25,000 in revenue. Add to this the costs of working with the subscriber before they cancel, as well as the cost of recovering hardware assets from the cancelled subscriber, and the true impact to the business is even higher.
In 2016 and early 2017, as mentioned above and shown on the right, E-vergent had a problem. They were adding customers every month but the total number of subscribers was not growing – in some months it was even shrinking.
WISPs have two levers in this situation: increase sales and decrease cancellations. Both can and should be attempted but reducing churn is the more cost-effective option as a lost customer not only represents lost future revenue but also adds unrecoverable support, hardware, installation and reputation costs.
To address the churn portion of this problem, E-vergent became an early Preseem adopter and the two companies have worked closely since.
How Preseem Helps WISPs Reduce Subscriber Churn
Preseem can help immediately reduce customer cancellations in a couple of ways:
- Preseem provides granular insights into customer QoE on a tower, access point, and subscriber basis, which isn’t available through traditional ICMP & SNMP-based network monitoring tools. This helps WISPs identify the sections of the network that have configuration, interference and load problems that are detrimental to the customer experience.
- Preseem’s QoE optimized plan enforcement provides a significantly improved customer experience compared to traditional plan enforcement solutions in routers, access points and other traffic management solutions. Among other problems, this helps to reduce “my Internet is slow” support calls.
At E-vergent, as shown in the graph on the left, the combination of addressing the network problems identified by Preseem and applying our QoE optimization has resulted in a positive turnaround.
More precisely, six months after the rollout of Preseem, the results were:
- 28% reduction in churn (1.08% to 0.78%)
- 63 retained customers
- 297 retained service months
- At E-vergent’s average revenue per user of $91 per month, this represents almost $27,000 of revenue that would otherwise have been lost
“Guided by Preseem, we have made many improvements to our network. I believe these improvements and Preseem’s optimization are the major reasons for our customer churn significantly decreasing.”
Managing Member and CEO, E-vergent
There’s nothing more frustrating to a WISP than working hard every month to add new subscribers but not seeing the overall business improve. It’s like trying to get to shore by treading water. Preseem helps WISPs understand their network so they can deliver a great customer experience which reduces churn and improves the business.
To see how Preseem can help your organization, book a demo with our friendly team today!
Bonus: How to Calculate Your Churn Rate
Most WISPs measure their churn on a monthly basis. The math to calculate churn for your business in any given month is simple: churn percentage = the number of cancellations in the month divided by the number of customers at the start of the month.
When calculating churn, it’s important to not include new customers. Other than “lower is better,” it’s hard to provide guidance on a reasonable churn rate for your business. However, here are a few comparisons based on research by Statista and the Carmel Group.
- Verizon Wireless: 1.28%
- AT&T Wireless: 1.65%
- T-Mobile: 2.22%
- 50% of WISPs report less than 0.5% churn