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Transcript of AR Mobile A4 0107
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How to generatecustomer loyalty in
mobile markets
Acquisition and Retention Study,March 2009
Global Summary Report
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How to generate customer loyalty in mobile markets2
Contents
3 Executive summary
4 Objectives and methodology
5 Uninspiring user experiences create churn and
erode profits
6 When do customers churn?
7 Customer loyalty declines as markets mature
8 Lack of loyalty translates into churn
9 Lack of brand awareness is growing
10 The power of promotions
11 Dissatisfaction drives decisions
12 Its who you know that counts
13 What makes a loyal customer?
18 Pinpointing the most effective strategies in
mature markets
19 Service and device portfolio
20 Network quality
21 Cost and billing
22 Customer care
23 Challenges and opportunities for mobile CSPs
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How to generate customer loyalty in mobile markets 3
Effective Customer acquisition and retention is fundamental for the profitability
and ultimate survival of communications service providers (CSPs). Nokia
Siemens Networks has therefore carried out a study to analyze the customer
experience in both the fixed and mobile market segments. This document
focuses on the mobile markets.
Customer loyalty generally declines and willingness to churn increases as
markets reach maturity. Recent churners often switch because of promotional
offers from competing providers, but dissatisfaction with their existing services
is an even more common reason. They are most likely to churn at between one
and three years, probably at the end of a 12 or 24-month contract.
The Nokia Siemens Networks Acquisition and Retention study therefore asks two
key questions. What kind of customer experience has to be provided to managechurn? And how can CSPs build a sustainable competitive advantage, apart from
running short-term promotions?
In mature markets, network coverage and quality are well-established, meet or
exceed customer expectations, and have little impact on churn. This is in marked
contrast to emerging markets, where CSPs are still establishing full and stable
coverage and quality and gaps in service can be a significant cause of churn.
Although the survey showed that there are different drivers in different markets,
the key message is that overall, customer care is the strongest driver of churn
decisions and provokes the highest levels of dissatisfaction right across the
globe. CSPs who are looking for a way to reduce churn may find that this is the
most productive area for future investment.
Executive summary
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How to generate customer loyalty in mobile markets4
In order to get a worldwide view about the customer experience under different
market conditions, the sample consists of mature markets which already
experienced heavy shifts in the market shares of different CSPs, as well as highly
competitive emerging markets.
The study is based on nearly 12,000 interviews and is representative for themarkets in which it was carried out: Brazil, China, Germany, Indonesia, Pakistan,
Russia, South Africa, UK, and US.
The key topics are:
What are customers key reasons for selecting specific service providers?
What does this decision-making process look like? Who (which people) and/or
what (which facts) have the biggest influence?
How likely are customers to switch CSP, and what are their reasons for
churning?
How satisfied are consumers with their current service providers and what
influences their satisfaction?
What can CSPs do to increase customer loyalty?
Mobile sample
Field period:12/08 to 02/09
11,866 interviews
Brazil
Fixed sample
Mobile sampleChina
Fixed sample
Mobile sample
United States
Fixed sample
Mobile sample
South Africa
Mobile sample
Indonesia
Mobile sample
Pakistan
Mobile sample
Russia
Mobile sample
United Kingdom
Fixed sample
Mobile sample
Germany
Fixed sample
Figure 1. The Acquisition and Retention study
is based on nearly 12,000 interviews, covering
nine countries.
Objectives and methodology
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How to generate customer loyalty in mobile markets 5
Customers in both mature and emerging mobile markets have increasing
expectations of the services that their CSPs can provide. At the same time there
is a lot of pressure on CSPs to cut costs, but the wrong kind of cutbacks can
increase customer dissatisfaction and increase churn, which has a direct impact
on EBITDA.
One example is that many mobile broadband providers, notably T-Mobile, are no
longer offering unlimited data plans but now have limits based on the amount of
data used or type of services consumed. But taking this step may alienate some
consumers, who may consider churning to another mobile broadband providerthat does not have data caps.
If acquisition costs are high, getting new customers to replace customers who
churn is a further drain on profits. It is always cheaper to retain customers and to
increase their customer lifetime value (CLTV) through intelligent customer
satisfaction measures than it is to lose existing ones and acquire new ones.
The good news is that a subscribers existing CSP is in an ideal position to
influence customer loyalty by delivering a performance that meets or exceeds
subscribers quality requirements.
Figure 2. EBITDA margin is adversely affected
by high rates of churn.
Uninspiring user experiencescreate churn and erode profits
0%
Blended churn rate, 2007
EBITDAmargin
60%0%
30%
40%20% 50%30%10%
60%
20%
50%
10%
40%
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How to generate customer loyalty in mobile markets6
Customers are most likely to churn at between 12 months and 3 years, probably
because most postpaid contracts last 12 or 24 months. Customers wait until the
end of their contract period, then churn to someone offering something more
attractive or whose promise of better service sounds good if they have not been
pleased with the service from their previous provider.
Knowing this, CSPs can defend themselves by creating specific offerings
designed to retain customers who are coming to the end of their contract period.
Because the early phase of a customers association with a CSP actually comes
at a cost to the CSP (the customers payments are still offsetting the cost of
acquiring the customer in the first place), it is a highly efficient use of CSP
resources to target customers whose acquisition cost has already been paid off.
Understanding what drivers these customers are responding to and what theirchief sources of dissatisfaction are is critical in deciding what actions need to be
taken to retain them.
Time/customer lifecycle
Positive CLTV
Limited harvestingNegative CLTV
= 5years
Duration of customer relation (%)
Customer life-time value
Total
Brazil
China
Germany
Indonesia
Pakistan
Russia
South Africa
United Kingdom
Critical time window
United States
0
20
40
60
80
100
Figure 3. Managing the customer lifecycle
the most customer churn happens between two
and three years after the initial contract is signed.
n=4229 respondents
When do customers churn?
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How to generate customer loyalty in mobile markets 7
There is a clear difference in customer loyalty between mature and emerging
markets. Some 70 percent of users in lightly-penetrated Pakistan wouldnt even
consider using a network other than the one that they are on, while just 15 percent
of German users feel this way.
Most customers in mature markets are therefore open to better offers or more
attractive packages from the competition, which means that no CSP can be
complacent and expect their customer base to stay with them over time, unless
they take specific steps to please them.
CSPs in emerging markets may have a strongly loyal customer base for now, but
as time passes and markets become more saturated, we expect that providers
will no longer be able to count on that loyalty. Instead they will have to earn it.
This means that CSPs in emerging markets who focus on customer satisfaction
and retention before they become issues can differentiate themselves and get
ahead of competitors who do not realise the threat of churn until they start seeingtheir subscriber numbers dropping.
1534
1
2 21 13 1
4
1
6
4
46
Totalin %
It is the only network I would ever consider using It is my preferred network, but not the only one I would consider
Just one of several networks I would consider Not a network I will stay with in the future Dont know
5
70
23
Pakistanin %
6
20 27
46
Brazilin %
8
5336
Russiain %
6 69
39
1
45
Chinain %
9
39
48
South Africain %
15
53
25
Germanyin %
13
56
27
United Kingdomin %
6
5835
Indonesiain %
17
56
20
United Statesin %
1
Figure 4. Customer loyalty is high in emerging
markets but evaporates in more saturated
markets.
n=7637 respondents
Customer loyalty declinesas markets mature
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How to generate customer loyalty in mobile markets8
In all markets, about 59 percent of customers have switched providers within
the last six months. The big difference between emerging and mature markets
is in the numbers of people that have switched at any point in their mobile
career. 52 percent of users in the UK have churned at some time in the past and
44 percent in Germany, while only 25 percent of people surveyed in China and
32 percent in Brazil have ever churned.
Dissatisfaction with the former mobile CSP was the number one reason cited by
churners in almost all markets. In other words, users arent just being lured away
by competing offers, theyre being driven away from their CSPs by dissatisfaction
with their existing service. This suggests that an investment in understanding and
reducing that dissatisfaction could significantly reduce churn in most markets.
The statistical exception is the UK, where handset subsidies play a bigger role
than elsewhere. This has led to the UK-specific number one cause of churn being
the desire for a handset upgrade. The danger of using handset subsidies to
attract users is that equally attractive handset subsidies on newer models are a
powerful churn lever once a customer has been with a CSP for a while and is
looking for a handset upgrade. If there is any dissatisfaction with the existing
CSP, that will then help the user decide to pick a new handset from another CSP
rather than staying with their current carrier.
Figure 5. Change of mobile CSPs and the top
two reasons for churning. Dissatisfaction with
the previous CSP is the top cause of churn
worldwide.
n=7637 respondents
Base: respondents who chose their CSP less
than six months ago
7
26
167
Totalin %
Switched less than 6 months ago Switched more than 6 months ago Never Dont know
1. Dissatisfied with my formermobile operator
2. Interesting promotion offer
9
23
69
Brazilin %
1. Interesting promotion offer
2. Wanted to take part in a bonusprogram
520
75
Chinain %
1. Dissatisfied with my formermobile operator
2. Contact by a competing mobileoperator
7
12
4548
United Kingdomin % Recent
switchesRecentswitches
1. Wanted a handset upgrade2. Dissatisfied with my former
mobile operator
9
3555
Germanyin %
1. Contract/pre-pay serviceexpired
2. Interesting promotion offer
5
3558
United Statesin %
1. Dissatisfied with my formermobile operator
2. Contract/pre-pay serviceexpired
Recentswitches
Recentswitches
Recentswitches
Recentswitches
Lack of loyaltytranslates into churn
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How to generate customer loyalty in mobile markets 9
While up to a third of customers in mature markets think that their CSPs have a
good brand on measures such as reputation, level of innovation, or advertising,
more significant is that nearly 10 percent of users answer I dont know to
questions about brand. This suggests that users are not paying attention to their
CSPs brand position in the market and/or just dont care about brand.
The number of I dont know answers increases rapidly when users are asked
about CSPs approaches to environmental sustainability or social initiatives,
and is three or four times the number of people who say that their CSPs are
excellent in these two areas. Either CSPs are not active in these areas, or their
investments in these areas are going unnoticed by about 40 percent of the
marketplace.
Overall, investing in brand per se is no longer adequate as a customer retentionmethod. Customers in mature markets are demanding performance from their
CSPs, not just a good image.
The brand picture in emerging markets is quite different. Tellingly, almost no one
answers, I dont know to any brand question, so brand awareness is strong at
all levels.
However, if the trends now visible in the mature markets begin to appear in
emerging markets as mobile penetration increases, then brand loyalty can be
expected to erode. Again, CSPs in emerging markets should be ready for this
trend.
Lack of brand awarenessis growing
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How to generate customer loyalty in mobile markets10
Overall, an average of 33 percent of actual churn decisions was triggered by
promotional offers from the competition, although this varied between markets.
Furthermore, 39 percent of non-churners say that a good offer would make them
consider churning. And if the improved offer comes down to price, a 10 percent
differential is the level at which customers start to consider churning, regardless
of the market.
Clearly, competing offers are a significant way that CSPs can lure customers
away from other providers, but it is not the deciding factor in 65 percent of churn
decisions.
Figure 6. The first half of the truth Around
35 percent of churn is triggered by promotional
offers from competitors.
>50
Perceived cost savings (%)5 10 20 30 40 50
Consider churn (% of all customers)Churn or interest in churn due to promotional offerfrom competitor (%)
Germany
Germany
United Kingdom
United States
China
Indonesia
Churners*
All customers
United Kingdom
Churners*
All customers
United States
Churners*
All customers
China
Churners*
All customers
Indonesia
Churners*All customers
*Within last 6 months
34
45
27
44
14
35
25
31
6740
0
20
40
60
80
100
Perceived price differencesof 10% or more trigger churn
The power of promotions
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How to generate customer loyalty in mobile markets 11
Many churners are not moving towards a better offer, theyre moving away from
a bad experience. Globally, almost 38 percent of churners say that they switched
because of dissatisfaction, and a comparable 39 percent of non-churners say
that dissatisfaction would make them consider churning.
The reasons behind peoples dissatisfaction varied widely between markets.
Where network quality is not yet firmly established such as in China and
Indonesia dissatisfaction with voice quality and coverage are major reasons to
churn. This is also a factor in the US, where geography and a fragmented market
have made high quality and broad coverage more difficult to attain than in other
mature markets, such as European countries.
However, in markets where consumer demand for good voice coverage and
quality has been met, customer satisfaction depends on issues such as customercare, contract structures and billing. Cost is a factor, yet not the number one
driver for churn in any market.
Clearly, CSPs who want to retain customers in more advanced markets need to
focus on more business-oriented areas. Traditionally, CSPs have competed
with each other on price and product, but our survey results clearly show that in
more mature markets, the competitive playing field is shifting to the rest of the
package the overall customer experience.
706050403020100
Churners top reasons for dissatisfaction (%)
Mobile serviceoffering
Billing
Costs ofservices
Offered ratepackages
Networkcoverage
Customer careservice
Voice/receptionquality
Churn or interest in churn due to dissatisfaction
with operator (%)
Germany40
5962
015
56
36
169
21
19
48
4850
42
52
28
5727
16
33
32
1532
37
41
123
5
5
4
12
300
11
Germany
United Kingdom
United States
China
Indonesia
Churners*
All customers
United Kingdom
Churners*
All customers
United States
Churners*
All customers
China
Churners*
All customers
Indonesia
Churners*
All customers
*Within last 6 months
28
52
28
32
44
34
42
56
47
22
Figure 7. The second half of the truth
Customers churn due to dissatisfaction with
their current CSP.
Dissatisfactiondrives decisions
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How to generate customer loyalty in mobile markets12
Around the world, family and friends are the most important source of information
that people use to determine which CSP to choose. This means that satisfied
customers will bring more customers, and dissatisfied customers will keep
potential customers from even considering the providers network.
And in the world of blogs and Facebook, where one comment may be posted and
viewed by many people, it becomes more important than ever for CSPs to keep
the general satisfaction levels of their customers high. Its not just about reducing
churn one customer at a time, its about retaining entire classes or categories of
customers who may begin to consider churning if the word on the street turns
against the CSP.
Salesperson ofa special mobilephone store
Advertisements/promotionsI received
Information inthe Internet
Salesperson ofthe mobile networkcompany store
TV/Radio 22
51
17
21
16
16
40
64
9
21
13
24
Family or friends
in %
Total
n=1179
Brazil
n=222
14
41
11
28
22
12
China
n=117
5
39
35
21
6
13
Germany
n=191
63
68
1
15
4
13
Indonesia
n=112
36
64
2
25
25
14
Pakistan
n=118
13
57
10
20
39
10
Russia
n=99
36
51
2
24
24
33
SouthAfrican=116
6
39
38
14
10
19
UnitedKingdomn=104
8
46
30
15
7
14
UnitedStatesn=100
Figure 8. Around the world, word of mouth is thesingle most important influence on which CSP
people choose. Users were asked to select the
top two influencing information sources.
n=7637 respondents
Base: respondents who chose their CSP less
than six months ago
Its who you know that counts
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How to generate customer loyalty in mobile markets 13
The survey sought to encapsulate the influence that different areas of customer
satisfaction have on the decision to churn and the results were expressed as a
percentage. The results across the mature markets are similar, but its worth
looking at some of the other markets individually.
Mature markets: The results from the mature markets indicate that voice quality
and coverage are not significant areas of interest for subscribers. Network quality
is already well-established across most CSPs and is therefore no longer a
significant differentiator among market players. The most important area is cost
and billing, and while call and mobile data costs are each significant contributors
in churn decisions, contract structure is even more important. This covers
everything about the users agreement with the CSP apart from the price, such
as contract duration, ease of getting top-ups, transparency of rate structures,
the suitability of existing rate packages for their lifestyle and so on.
Figure 9. What makes a loyal customer:
churn drivers for mature markets.
Customer care
Status info aboutinquiry
Competence of staff
Time to solve query
Cost and billing
Voice rates
Suitability of ratepackages
Flat rates for voiceand data
Service & deviceportfolio
Low cost handsetavailability
Relevant handsetavailability
Text and picturemessaging quality
Network andservice quality
Voice quality andstability
Call set-up time
Establishing a dataconnection on the
first try
Momentsof truth
Self-care
Handsetavailability
Handsetcost
Mobile dataservices
Voicequality
Voicecoverage
Data coverageand quality
Callcosts
Mobile
data costs
Billing
Contractstructure
Customer careeffectiveness
Complainthandling
7
7
12
4
2
5
1310
1
17
9
8
4
Customer retention drivers impact in %
What makes a loyal customer?
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How to generate customer loyalty in mobile markets14
China: Chinese subscribers prioritise the various aspects of their experiences
quite differently. Whereas the mature market average showed a low relative
importance of network quality and then a fairly even balance among costs,
customer care, and the service and device offering, Chinese customers are
driven by cost first (62 percent) and network quality second (27 percent), while
customer care and handset issues have almost no influence. However,
contract structure is by far the most important driver in the Chinese market,
rather than actual price. This means that there is significant scope for Chinese
CSPs to attract customers with clear and transparent pricing structures. Rate
understandability was the second most important retention factor in the cost and
billing category.
Typical of emerging markets where country-wide network rollout may not yet be
complete, Chinese consumers also indicate that network quality is important tothem. And within the relatively less important area of customer care, Chinese
consumers make it clear that they expect competent staff who can resolve their
requests quickly.
Customer care
Competence of staff
Delivered outcome ofrequest
Time to solve request
Cost and billing
Voice rates
Rate understandability
Suitability of ratepackages
Service & deviceportfolio
Handset cost
Mobile internet
Picture messaging
Network andservice quality
Voice quality andstability
Indoor coverage
Call set-up time
Momentsof truth
Voicequality
Voicecoverage
Data coverageand quality
CallcostsMobile
data costs
Billing
Contractstructure
33
10
6
11
1814
2
28
124
Handset cost
Mobile data services
Self-care
Complaint handling
Customer care effectiveness
Customer retention drivers impact in %
Figure 10. What makes a loyal customer:
churn drivers in China.
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How to generate customer loyalty in mobile markets 15
Indonesia: Network quality is the most important driver for Indonesian users
(42 percent), which is typical of emerging markets. Next most important is cost
and billing (40 percent), with the contract structure area once again being
considered more important than the actual costs that users pay. Anecdotal
evidence from other emerging markets suggests that while users are concerned
about costs, most CSPs in a given market may all have a similar low-tier cost
structure, so that cost does not become the most important churn driver even in
very cost-sensitive populations. Where the differences matter is in how these
costs are packaged and how understandable and stable they are over time.
While customer care has a low overall importance to churn decisions (17 percent),
customers do indicate that they would like to be able to find out about the
progress of their enquiry and to be sure that the CSP can solve their problem
quickly.
Note that because CSPs do not sell handsets in Indonesia, the Service and
Device Portfolio category is not valid as a churn driver for this market.
Figure 11. What makes a loyal customer:
churn drivers in Indonesia.
Customer care
Status info aboutinquiry
Delivered outcome
of request Length of timeto solve a problem
Cost and billing
Cost of calls tolandlines
Stability of ratesover time
Calls to othermobile networks
Service & deviceportfolio*
Network andservice quality
Voice quality andstability
Indoor coverage
Geographiccoverage
Momentsof truth
Self-care
*Note: Handsets not included in surveybecause Indonesian operators do notprovide them
Voicequality
Voicecoverage
Dataquality
Callcosts
Mobiledata costs
Billing
Contractstructure
Customer care
effectiveness
Complainthandling
Customer retention drivers impact in %
19
14
9
15
22
21
7
73
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How to generate customer loyalty in mobile markets16
Pakistan: The Pakistani results are remarkably balanced. Network quality is
the most important driver, but only by three percentage points at 33 percent,
followed closely by cost and billing and with customer service not far behind that
at 25 percent. The message for CSPs in Pakistan is that all aspects of customer
retention are equally important to their customers, with once again contract
structure and improved data coverage being two of the most important areas for
attention and improvement.
Similar to Indonesia, CSPs in Pakistan do not directly provide handsets to their
customers, so the type of handset available is not a churn driver in Pakistan.
Figure 12. What makes a loyal customer:
churn drivers in Pakistan.
Customer care
Status info aboutinquiry
Ease of self-care on
internet Length of timeto solve a problem
Cost and billing
Text message costs
Internationalroaming costs
Cost of calls tolandlines
Service & deviceportfolio*
Picture messaging
Text messaging
Network andservice quality
Text messagingreliability
Indoor coverage
Voice quality
Momentsof truth
Self-care Mobile data
services
*Note: Handsets not included in surveybecause Pakistani operators do notprovide them
Voicequality
Voicecoverage
Data coverageand quality
Callcosts
Mobiledata costs
Billing
Contractstructure
Customer careeffectiveness
Complainthandling
Customer retention drivers impact in %
11
12
8
13
105
1
14
10
9
6
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How to generate customer loyalty in mobile markets 17
Customer care
Ease of self-care oninternet
Delivered outcome
of request Status info aboutinquiry
Cost and billing
Voice rates
Suitability of ratepackages
Flat rates for voiceand data
Service & deviceportfolio*
Text messaging
Picture messaging
Choice of multimediaand Internet services
Network andservice quality
Voice quality andstability
Indoor coverage
Establishing a dataconnection on the
first try
Momentsof truth
Self-care
Mobile dataservices
*Note: Handsets not included in surveybecause Russian operators do notprovide them
Voicequality
Voicecoverage
Data coverage
and quality
Callcosts
Mobiledata costs
Billing
Contractstructure
Customer careeffectiveness
Complainthandling
Customer retention drivers impact in %
17
17
10
13
10
31
11
6
7
5
Figure 13. What makes a loyal customer:
churn drivers in Russia.
Russia: Russia shows a fairly typical emerging market picture of churn drivers,
in that network quality and coverage are by far the most important (40 percent
overall). CSPs are still focused on initial network development and coverage of
a wide geographical range, so that the area covered by one CSP might be
significantly different from the service footprint of another CSP, and these
differences in coverage location and quality can be the main basis on which
people choose a provider.
Russians also find mobile data services very important (17 percent). Mobile
data services within the service and device portfolio means SMS and MMS only,
and their high level of importance can be seen as another issue of network
quality, since they may not work reliably enough. On this basis, the Russian
market shows that voice and data quality concerns drive more than 50 percent
of churn. Contract structure and effective customer service are still important,but their importance is overshadowed by the influence of service quality.
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How to generate customer loyalty in mobile markets18
By comparing the areas that have the biggest influence on churn and the levels
of subscriber satisfaction they generate, CSPs can see where an investment of
resources is likely to have the biggest impact on customer retention.
Contract structure and call costs are the areas that are currently generating the
most dissatisfaction with CSPs in mature markets. Significantly, contract
structure is a much higher churn provoker than actual costs, and a source of
more dissatisfaction. Customers dont like how much theyre paying, but they are
even more irritated by how their payment schemes are set up. This might be
because rates are too obscure, do not match the needs and desires of the user
base, or change too frequently. Mobile data costs are also perceived to be
unsatisfactorily high.
Network quality and coverage is generally satisfactory and has a low impact onchurn, while all customer care issues can clearly be improved.
The take-home message in mature markets is that rate transparency, call
charges, and customer care improvements are all areas where improvement by
a CSP can have the most impact on reducing churn.
Contractstructure
100%0%
Satisfaction% of Excellent ratings from customers when asked about their operators current services
Impact
60%0%
10%
40%20%
20%
Mobile dataservices
Mobile datacosts Customer care
effectiveness
Complainthandling
Data coverageand quality
Handsetcost
Handsetavailability
Call costs
Self care
Billing Voice coverage
Voice quality
Operator improvementwill have the greatestimpact on churnreduction in these areas
2621
41
11
Figure 14. Developed Markets: Contract
structures, costs, and customer care are least
satisfying to subscribers.
Pinpointing the most effective strategiesin mature markets
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How to generate customer loyalty in mobile markets 19
Overall, users in mature markets are pleased with SMS, MMS and voicemail
services, which they consider vital for user satisfaction. There is a much lower
level of satisfaction with handset offerings, where users would prefer lower prices
and a wider selection of brands. However, this dissatisfaction with the overall
handset offering does not translate into churn, perhaps because users feel that
they would not get a better handset deal from another CSP.
Overall, CSPs who want to take actions to reduce churn would do better to focus
their organizational efforts in areas other than services and device portfolio.
Figure 15. Developed Markets: Services andDevices. High satisfaction from basic data
services, but consumer desire for a wider
handset choice is not being met.
21
41
11
100%0%
Satisfaction% of Excellent ratings from customers when asked about their operators current services
Impact
60%0%
10%
40%20%
20%
Textmessaging
Picturemessaging
Voicemailservice
Choice ofsuitable handsets
Low-costhandsetchoice
Handsetrecyclingservices
Low-radiationhandsetsoffered
Desired brandsoffered
26
Handset costin contract
Good deals for
new and existingcustomers
Service and device portfolio
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How to generate customer loyalty in mobile markets20
Across all mature markets, there is general satisfaction with voice and SMS
coverage and quality. Yet mobile Internet lags seriously. This is one area where
CSPs can improve their services and increase customer satisfaction. This makes
sense because mobile Internet is a much younger product than mobile voice or
SMS, and it is not surprising that the stability and speed of mobile Internet
offerings are still developing.
Figure 16. Developed Markets: Network Quality.Subscribers are satisfied with voice quality but
data has not achieved excellence.
2621
41
100%0%
Satisfaction% of Excellent ratings from customers when asked about their operators current services
Impact
60%0%
10%
40%20%
20%
Voice callsetup time
Voice stability
SMS and MMS reliability
Geographic coverage
Voice coverage
Mobileinternetspeed
Mobileinternetstability Establishing
data connectionon first try
11
Indoor coverage
Network quality
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How to generate customer loyalty in mobile markets 21
Mature markets around the world show a remarkably stable pattern of low
satisfaction with call rates (especially with mobile Internet, data and email costs),
but this dissatisfaction has a low impact on the overall decision to churn. In other
words, customers dont like their call costs or how theyre structured, but this
dissatisfaction in itself is not strong enough to drive churn. This suggests that
dissatisfaction with call costs is universal, and its the hope of finding a cheaper
deal combined with another dissatisfaction measure, such as unstable mobile
broadband or lousy customer care, that makes users actually make the move to
another CSP.
Figure 17. Developed Markets: Cost and Billing.Overall satisfaction with costs is low, especially
for mobile data costs.
2621
11
100%0%
Satisfaction% of Excellent ratings from customers when asked about their operators current services
Impact
60%0%
10%
40%20%
20%
Call cost tolandline
Same-network call costTopup voucher denomination
Rate suitability
Rate stabilityData rates
Flat rate options
Email cost
MMS cost
Subscriptionrate
Rate transparency
National call cost to other networks
Bonus programs
Voice rates
Ability to change package
41
SMS costMobileinternet cost
Internationalroaming cost Call cost to
voicemail
Cost and billing
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How to generate customer loyalty in mobile markets22
Customer care has by far the most elements of any driver category that combine
low satisfaction with a high effect on churn. Long waiting times on the telephone,
incompetent staff and the difficulty of finding information on the Web all frustrate
the expectations of subscribers.
The implication for CSPs in mature markets is clear: improving customer service
competence and offering the ability for customers to serve themselves via the
Web and other means is one of the most powerful, effective ways for CSPs to
increase customer satisfaction and reduce churn.
Figure 18. Mature Markets: Customer Care.Customer Care issues have high overall impact
on decisions to churn and low overall
satisfaction.
26
41
11
Cost of customerservice call
100%0%
Satisfaction% of Excellent ratings from customers when asked about their operators current services
Impact
60%0%
10%
40%20%
20%
Ease of websiteself-service
Complaintstatus update
Staff friendliness
Staff competence
Achievedoutcomeof requestWebsite
useful forinformation
Helplinewait time
21
Problem resolution time
Customer care
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How to generate customer loyalty in mobile markets 23
The churn triggers are different in developed and emerging markets. CSPs in
emerging markets must understand this, because the issues that they face today
are the ones that mature markets were facing 10 years ago, while mature
markets can show them whats in store in the medium term. Forward-looking
CSPs in emerging markets will note now that customer care and pricing
structures tend to become sources of dissatisfaction once network quality issues
have been addressed. Emerging market CSPs that plan early for improved
customer service will be able to discourage churn before it even becomes an
issue in their market.
Several potential strategies could prove especially fruitful, depending on the
specific market that the CSP is operating in:
Continued improvement of network coverage and quality, especially for mobile
Internet. Addressing customer care effectiveness and decreasing the time taken to
resolve problems will improve satisfaction in all markets.
Better understanding of customer usage patterns can lead to the creation of
novel contracts and pricing structures that will be more transparent and
satisfying to customers.
Better customer understanding can help CSPs create new offers to increase
the retention of customers whose contracts are ending.
The key message is that customer care is the strongest driver of churn decisions
and provokes the highest levels of dissatisfaction right across the globe. CSPs
who are looking for a way to reduce churn may find that this is the most
productive area for future investment.
Challenges and opportunitiesfor mobile CSPs
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