Study: Loyalty Lacking in Mobile Customers
By Alex Palmer
September 10, 2012
A new report finds that mobile carriers have more work to do in retaining customers, particularly in offering stronger loyalty rewards and more transparency in their billing methods. According to the CMO Council’s new report, "What's Critical in the Telecommunications Vertical
,” sponsored by Ricoh, only 34 percent of mobile subscribers feel loyalty to their carriers and have stayed with their current service provider for more than five years.
The study, which drew on the responses of 1,660 mobile subscribers, also found that just 29 percent describe themselves as loyalists while 41 percent say they either felt apathetic or on the fence about their service provider.
The top complaints that respondents had about their carriers were hidden fees (21 percent), bad service or network speed (17 percent), and high data or text costs (17 percent). This is not a bidding war based on price, according to Liz Miller, vice president of marketing programs for the CMO Council, but a “service war” where customers don’t mind paying more if they know what it is they are paying for.
“Today’s consumer has the expectation that they not only receive the service that they pay for and the equitable value that they pay for, but that that service is high-touch, high-value, and that they are being rewarded for their loyalty,” says Miller. “’If I’m loyal to you, be loyal to me.’”
She emphasizes that the research shows individuals want to work with a company that can connect with customers on a personal level. Part of that means not sending redundant marketing messages for services the consumer already has.
Miller points out that, historically, consumers have been much more open to staying with the same company.
“So many consumers are having their heads turned by the glut of advertising, marketing, and messaging that is really confronting them on what they feel is a continuous basis,” says Miller.
She adds that the strides made in billing communication serve as an example of how mobile companies have made improvements in recent years, whereas five years ago they may have been confusing and nearly incomprehensible, but are now getting clearer. Though work remains to be done as the “hidden fee” complaint in the survey demonstrates.
Six years ago, the CMO Council conducted a survey of mobile consumers about their priorities and respondents focused on the device itself, saying they wanted a phone that fit their lifestyle, but wasn’t so confusing that they had trouble using it. Now, as the devices themselves have evolved, Miller sees the priority has shifted away from the technology and toward service.
“People aren’t switching mobile carriers because of the tech those carriers offered,” says Miller. “They were changing because of their value, service, and loyalty they felt they would get if they moved to another carrier — it wasn’t about the device, it was about the relationship.”
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