Telco executives tend to worry about the business becoming a price-focused competition rather than a value-driven or experience-rich product.
But there actually are signs that price-based competition leading to high churn is less a problem in the mobile business than pessimists would have predicted, at least in the U.S. mobile market, so far.
The reason is simply that churn rates in the U.S. mobile market are quite low, overall, though there are key differences between postpaid and prepaid accounts, multi-user and single user accounts.
And low churn arguably is evidence that customer experience is reasonable enough not to encourage churn behavior. So a reasonable observer might argue that, despite past failings,
telcos are getting better at customer experience.
That wasn’t always the case. A study by Ericsson suggested that almost 40 percent of subscriber churn can be attributed to perceived poor levels of experience from service providers.
In extreme cases, such as in the Indonesian, Malaysian and Sri Lankan markets, nine out of the top ten reasons for churn are related to poor levels of customer experience, Ericsson noted.
But telcos now pay attention to churn and customer experience that can lead to churn. A new poll by Gartner suggests telco efforts actually are backed up by end user opinion.
A Gartner survey found end users rated Amazon, Target, Walmart, AT&T and Google as among entities that had the best user experience. That AT&T would score in line with Amazon should come as a bit of a surprise, since most would consider Amazon the best at online retailing and user experience while doing so.
The leaders had three things in common, Gartner suggests. They had frequent customer contacts supported by intensive use of technology and delivered on a straight forward brand promise (doing a few good things well).
Why did the 496 polled consumers rate these brands outstanding? The most important feature is getting the product right.
Second, customers rated helpful staff as key to outstanding customer experience. The third critical factor is problem resolution: Consumers recognize things will go wrong sooner or later: It is how you deal with the problems that can win you customers.
The point is that many telcos now are doing a far better job of creating and sustaining customer experience programs that are slicing churn.