Why Customers Switch TEM Vendors

The TEM (telecom expense management or technology expense management) industry endures quite a bit of customer churn. In fact, half of enterprises report to AOTMP® that they have switched TEM vendors since their initial vendor was selected and implemented. While the rate of churn is significant, the pace of churn is often masked by multi-year contractual obligations and the fact that customers rarely hot-cut from one vendor to another – transitions can last more than a year for large, complex migrations.

So, what’s driving the change? The top five reasons given by enterprises are:

1. Vendor over-promised and under-delivered
2. Lack of data accuracy
3. Inadequate customer service/support
4. Software did not perform as expected
5. Cost was too high for the value received

Put simply, misalignment is the underlying cause for customers leaving TEM vendors. This does not mean that misalignment is a norm in the industry, though. Misalignment is a byproduct of partnerships that fail to adapt and evolve. When partnership is strong between a TEM vendor and a customer the likelihood separation decreases.

TEM vendors and customers alike can avoid relationship fracture by engaging in open and frequent dialog. Discuss the state of the business partnership, the value generated through the relationship, and the next level of business impact sought. When this happens, the risk of churn diminishes.