Communications Service Providers

Does the age of consumerism jeopardize loyalty?

Share this post:

“Customer first” has been a slogan slavishly promoted by communications service provider (CSP) executives for years. However, results from the most recent IBM global telecommunications consumer survey seem to indicate that CSP’s customer satisfaction investments have not produced the positive results desired. The survey of over 13,000 consumers in 25 countries reveals that customer advocacy levels are still quite low. Globally, more than three times as many customers are negative or antagonistic towards their CSP than those who describe themselves as positive or advocates. Less than one in five consumers of communication services are advocates for their CSPs, contrasting sharply with industries as retail and banking, where the level of advocacy is twice that of the telecommunications industry. So, why is customer first not delivering? And what should CSPs be doing differently?

CSPs have always measured high customer satisfaction (CSAT) scores, but high CSAT scores have not been translated into high advocacy levels and increased market share. Though customer satisfaction is important, competitive advantage takes a distinctive customer experience that goes beyond satisfaction and creates real value for the customer. CSPs should offer an experience that helps consumers form an emotional engagement with their CSP, compelling them to stay, increase spending and recommend their CSP to others. An example of customer experience excellence is Apple, whose customers have become passionate champions for the brand because of the unique experience Apple provides. Research has revealed that Apple advocates generate revenues about 45 percent higher than their competitors’ best customers. Some other examples of customer experience excellence are Starbucks and Walmart.

There are no such examples in the telecommunications industry, while the bar for service excellence has been raised higher than ever. In today’s “always on” environment, CSPs feel their customers pulling away rather than getting closer. As they encounter new products, services and experiences on virtually a daily basis, many consumers feel less loyalty towards specific brands. At the same time, consumers now wield unprecedented power over how brands are perceived. They can build and demolish brand strength as they blog, text and comment via social media about their various consumer experiences. It seems they increasingly trust consumers like themselves – and even strangers – more than providers. CSPs need to recognize that consumers are in control and are conducting conversations in which they may not be included.

ibm global telecommunications consumer survey

Now, more than ever, CSPs must communicate with their customers to understand what matters to them. They should take action to become part of the digital dialogue and be prepared to proactively respond to negative chatter. Integration of traditional and new digital channels is key to interact with customers in an effective way. An example is Bharti Airtel where a group of employees are responsible for manning the Facebook, Twitter, LinkedIn and Orkut accounts addressing complaints, queries and requests from customers. They are scanning for every tweet which contains the word “airtel” and giving appropriate replies to the customers and solving the issues.

CSPs should invest in advanced analytics to mine digital channels, such as blogs, tweets, social networks, peer reviews and consumer-generated content to access customers’ honest, unmediated views, values and expectations. By capturing viewer insights from social media sources, RTL Netherlands is able to gather timely feedback from viewers on the television programmes ‘X Factor’ and ‘So You Think You Can Dance’. This helps the entertainment company to better understand audience needs and preferences and increase viewer experience and involvement.

And last but not least CSPs should consider a new set of metrics – such as the Customer -Focused Insight Quotient (CFiq) – that goes beyond a single measure of satisfaction (such as NPS), and has a more direct linkage with customer advocacy and experience. Programs should target behavioral, emotional and rational aspects of the customer relationship to directly improve the bottom line and customer key performance indicators. By deepening their understanding of consumers to enhance their experience, CSPs can increase the value of the relationship.

More details on how to augment advocacy can be found in this study:  Building advocacy in telecommunications.

 

Global Industry Leader Telecommunications, Media & Entertainment at the IBM Institute for Business Value

More stories

Stopping Scams is not a Technology Challenge

Don’t give money to strangers! Australians are being scammed and are losing money.  Somehow when a stranger calls and says, “We’re the Tax Office, you owe us money.  Pay up. With iTunes cards,” people who ordinarily perform and function well in everyday life hand over money to strangers.   What’s the trick? Part of the conman’s […]

Continue reading

Omni-Channel Commerce for CSPs

A friend of mine told me that they had bought a new couch and put the old one in the basement.  When the spouse came home, seeing the old couch in a new place and said “we really need to spruce up this basement to go along with that couch”.  The project was ultimately handed […]

Continue reading

Outthink the network with the help of Dynamic Operations

I departed on a trip recently for work after not traveling for a few months. It was an odd rhythm in the summer for me compared to the past number of years. I realized as I traveled across the ocean I normally overlook a number of things as I journey. The same may be true […]

Continue reading