Key drivers of loyalty in the mobile market
The world's 6.5 billion mobile phone subscribers are likely to become vocal and active detractors if they have a negative customer experience, according to a global study by the Chief Marketing Officer (CMO) Council.
Only 34% of 1,660 mobile subscribers surveyed around the globe in the second quarter of 2012 are loyal to their carriers and have stayed with their current communications service provider for more than five years.
And this loyalty is increasingly being called into question, as customers grow frustrated with more fees, intermittent quality of service, lack of carrier respect, and the frustration of trying to figure out all the options and features of increasingly complex plans.
According to the Ricoh-sponsored study, entitled 'What's Critical in the Telecommunications Vertical', 41% of mobile phone subscribers say they will lodge a complaint about a poor experience, 36% will cancel their service, and 29% will tell everyone they know about the incident.
Only 29% of those polled across all age groups characterized themselves as loyalists. In contrast, a total of 41% of respondents said they were either apathetic, on the fence, or just about gone when it comes to the relationship with their mobile service operator.
So what is triggering the switching and churn among mobile phone subscribers? Not surprisingly, high service plan costs contributed to 48% of departures, a better deal with more all-inclusive options seduced 26% of defectors, and poor quality of service, such as dropped calls or bad reception, eroded another 23% of subscribers.
"Consumers are seeking fast, reliable, and predictable access to services and experiences they initiate using their mobile devices," said Liz Miller, vice president of marketing programmes for the CMO Council. "While they can't live without their mobile devices, they certainly aren't hesitant to vocalise their dissatisfactions and express their freedom of choice in selecting another service provider."
Highlights from the CMO Council's mobile subscriber survey included:
- Hidden fees (21%), bad service or network speed (17%), and high data or text costs (17%) topped the list of complaints.
- A surprising 56% of respondents fail to see equitable value to cost or are unsure of the fees they pay in proportion to the service they receive.
- Few consumers expressed concerns over a lack of online access (6%) or paperless billing (3%).
- Consumers are mostly using their phones for calling (84%), texting (73%), taking photos (48%), and going online (39%).
- Service providers seems to be leaving money on the table, as 41% of consumers had issues regarding how well they were notified or informed about other products or services.
- While 36% of consumers say they will cancel their service after a negative experience, 29% believe their carriers simply won't care about their defection.
"Function fatigue and feature frustration once summed up the global consumer's experience with complex, over-engineered mobile devices; now this has become the consumer mind-set about their overly complex plans and online account management interface," concluded Miller. "Consumers are looking for assurance that their longstanding loyalty will be repaid with service and relevant communications instead of paying high fees to receive enhanced web services."
The CMO Council also surveyed 147 marketers from communications service providers (CSPs) worldwide. Most appear to be focused on better segmenting, targeting, communicating, and delivering service to their customers. There is a keen awareness among those surveyed for the report that their subscribers want lower-fee plans with higher-touch, personalised service, yet a majority of marketers in these organisations still feel that technology innovation and advancement will satisfy subscribers and grow loyalty. Ironically, only 13% of consumers described themselves as technology fiends, eagerly awaiting new innovations to secure their loyalty.
Among the top subscriber engagement priorities for CSP marketers are:
- Retaining their most valuable customers and driving loyalty (47%);
- Improving the relevance of communications (40%);
- Developing new points of engagement (38%)
- Educating customers through relevant content (33%).
But age-old issues involving data, insights, and functional silos that block access to critical customer insights are still challenging marketers who are seeking to execute more relevant, targeted precision marketing campaigns. A surprising 65% of marketers admitted they are not at all confident in their knowledge of the customer, and more than half believe they need better access to real-time analytics to improve their customer lifetime value profiles. Interestingly, 54% indicated that tighter alignment of front-line resources is also needed.
The 32-page report has been made available for free download from the CMO Council's web site - click here (free registration required).
Sources: Chief Marketing Officer CMO Council; Ricoh / The Marketing Factbook.
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