Friends' influence helps telecom firms retain customers

Retaining customers is a central concern in many industries, including IT markets, where churn rates—the rate at which subscribers to a service discontinue their subscriptions—are high. For example, cell phone companies report churn rates of as much as 2% per month, which affects companies' value and profitability. A new study tested a strategy to help a telecommunications firm manage churn. Contacting not only customers but also their friends helped reduce the customers' propensity to discontinue their ties to the company.

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