Customers can’t get no satisfaction… but they try

Foxcroft Academy (c) [CC BY 2.0]

Foxcroft Academy (c) [CC BY 2.0]

About 10 years ago the telecoms industry suddenly agreed with itself that the ‘customer experience’ was key. Yes, the term had no doubt been kicking around before that time, but my memory tells me that in 2005 or so it ‘took off’. Defining it, understanding it and then maximising it, was what both business and consumer telecoms was going to be all about, we were told. 

Why so sudden; why so adamant?  Because up to that point, everyone agreed - without really thinking about it - that the classic telecoms organisational focus had rightly been on the network itself and on the back office systems that fed and controlled it. A positive customer experience and resulting customer satisfaction was therefore seen as just the natural result, a function, of all the expensive technology working properly - a big solid arrow indicating an output at the far end end of the diagram. 
Of course now that it had a buzz-phrase we could all see how important the ‘customer experience’ was. In a fast-commoditising mobile world (when has it not been?) the positive customer experience could be fashioned into a churn-reducing, ARPU-enhancing differentiator when everything else looked pretty-much same. That meant that generating lots of good customer experiences would mean customer retention and possibly the difference between commercial success and commercial failure. 
The problem is that 10 years later much customer experience has flowed under the bridge - some good, some bad, much indifferent - and the customer experience mojo hasn't worked to make people feel any more or less loyal towards their particular provider. 
Need proof?  The WDS (a Xerox company) Mobile Loyalty Audit 2014 is just out and it paints the usual bleak picture.  4,000 mobile subscribers interviewed, much doubt thrown on the whole concept of mobile customer loyalty.

Here’s a taste:

  • 26 per cent of those interview admit that the only reason they stay with their current provider is that switching is ‘inconvenient’
  • 15 per cent agreed that all operators are the same and that they see no benefit in switching
  • Over a third (35 per cent) simply do not want to risk changing for fear of losing coverage
  • 55 per cent of retained customers agree that they stay because their current operator meets their service expectations
  • Just 16 per cent of mobile consumers feel rewarded for their loyalty

 The report concludes that big spending on retention is having little impact: even where it has resulted in satisified customers they still insist on churning to other providers, perhaps believing that the industry as a whole has pulled its socks up and therefore, perversely, where customers are generally happy they may feel confident enough to change providers believing that equally good (or equally indifferent) experiences await.
According to WDS’ analysis, customer retention in the mobile industry is being driven by inertia, with over a quarter of customers staying with their mobile operator only because they find it too inconvenient to switch. In fact, says WDS, the facts indicate that operators are misinterpreting their satisfaction metrics, believing satisfaction equals loyalty and therefore actively investing in customer retention measures to bag the benefit. But, says WDS, there’s not much evidence that retention budgets are having any meaningful impact,  at least given the answers to its survey.
According to Tim Deluca-Smith, vice president of marketing at WDS. “Operators appear no closer to establishing what customer loyalty actually is, or how to proactively engender it. The data shows that operator customers are staying put, not because they feel any emotional attachment or loyalty to the brand. They’re not switching because of inconvenience related to technical, social or financial barriers.”  Indeed less than half the retained customers (44 per cent) feel highly satisfied (and those are the ones that stayed!).
Given that, why do switchers bother switching?

  • 54 per cent didn’t feel valued
  • 54 per cent cited ineffective rewards and loyalty programmes
  • 44 per cent did not trust their operator

“Many in the industry believe that customer satisfaction automatically translates to retention,” says Deluca-Smith. “This is not true. Certainly, customer satisfaction is correlated to retention and a highly satisfied customer is seven times more likely to be retained, but this cannot be relied upon. Satisfaction is no longer a differentiator for mobile brands, it’s an expectation.”
Is there a solution? As WDS has broadened the scope of the survey to extra companies and the results have stayed pretty uniform, we can only conclude that there’s something endemic in the mobile operator business model which makes loyalty a hard-to-come-by quality.  
Personally I think it’s because mobile operators are seen to stand between users and the services and other end users they want to reach, rather than be seen as enablers for those relationships and content experiences.
Instead of taking credit for enabling Skype or Google Search, WhatsApp or Youtube, they seem to be in grudging allowance that the most popular services and apps are even available. That and the fact that mobile operators are obviously and constantly trying to extract money when customers least expect it.
It’s not a great position to build a loyalty-inducing business proposition around.

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