Few Customers Loyal to Mobile Carriers
September 9, 2012
Only a small portion of the world’s mobile phone subscribers are loyal to their carrier, according to a global study by the Chief Marketing Officer Council.
Of the 1,660 subscribers surveyed in the second quarter, only 34 percent have remained with their current provider for more than five years. “And this loyalty is increasingly being called into question,” the Chief Marketing Officer Council reports, “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.”
The study, sponsored by the global technology company Ricoh, found that less than one-third of people (29 percent) polled across all age groups defined themselves as being loyal.
“In contrast, a total of 41 percent 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,” a significant 36 percent of individuals polled said they will cancel their service, according to the study.
“Consumers are seeking fast, reliable, and predictable access to services and experiences they initiate using their mobile devices,” noted Liz Miller, VP of marketing programs for the Chief Marketing Officer Council, in a statement. “While they can’t live without their mobile devices, they certainly aren’t hesitant to vocalize their dissatisfaction and express their freedom of choice in selecting another service provider.”
Customer loyalty is fleeting. In today’s age of choice and broad competition, the decision to stick with a brand, service, or solution is left completely in the hands of a more fickle consumer. Marketers, in turn, are dedicating large portions of their budgets to developing retention programs designed to maximize individual customer value while minimizing the inevitable rate of churn.
This lack of loyalty is threatening to become even greater as customers become more frustrated with fees, poor service quality, lack of respect from their carriers, and the difficulty of navigating complex plan offerings.
The writing is on the wall: the natives are restless. Those marketers who do not take the opportunity to develop more intimate, direct, and meaningful relationships with their customers—demonstrating a balanced level of insight and knowledge without being intrusive or abrasive—will learn that in an age of choice, loyalty has an expiration date that accelerates thanks to irrelevance.
The Consumer View
The consumer mobile mindset can be summed up in one word: choice. The overwhelming majority of respondents to the CMO Council’s online survey selected their own mobile service plans and have been with their current provider between one and five years (48 percent). However, the relationship may not be entirely solid. While 29 percent of consumers describe themselves as rain-or-shine loyalists, 24 percent are on the fence, open to jumping ship if a better relationship presents itself.
The Marketer View
For their part, mobile industry marketers are striving for more customer-centric, data-driven, and holistic end to-end engagement. Few are seeing the volatility in the market over the past few years, giving executives an opportunity to focus on upsell and cross-sell programs rather than holding on and minimizing churn.
Among the top priorities for marketers in the coming 12 months is developing a greater level of loyalty and affinity among customers in order to maintain high levels of retention. According to respondents, nearly half are looking to retention programs to drive advocacy, while 38 percent point to establishing new points of engagement with customers in an attempt to grow loyalty. What is significant is a concerted drive to push for relevance, as 41 percent of marketers believe that improving the relevance and value of communications and content will be a top engagement priority, while 33 percent look to relevance as a key vehicle to educate customers about services, technologies, or changes to solutions.
Growth and industry leadership will be dependent on who can deliver superior customer service, over-achieve customer expectations, excel in wireless performance, offer value-added mobile capabilities.
Telecommunications marketers know that their customers are, in general, captive audiences and they recognize the need to develop retention programs, reduce churn, and optimize the customer experience. In the new CMO Council survey, marketers report that their three top customer engagement priorities are:
(1) Retaining relationships and building stronger affinity with existing customers (47 percent).
(2) Improving the relevance and value of communication by leveraging targeted content (40 percent).
(3) Developing new points of engagement in order to grow loyalty and advocacy (38 percent).
One survey question reveals the extent to which marketers face internal obstacles. When asked what would improve their visibility into insights about customer retention, profitability, and lifetime value,
59 percent of marketers say they want better access to real-time customer data and analytics,
54 percent want tighter alignment directly engaged with end users (including sales and customer service).
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