50% of broadband customers have churned
More than half of broadband internet customers have switched providers at some point, according to research by call centre and customer service specialist Orchid Consulting, which suggests that the industry's churn figure may be significantly higher than previously thought.
When asked why they chose to switch providers, a poor internet connection speed was cited as the most common reason. This, the company points out, is at odds with the most common reason for a consumer's choice of service provider: price, rather than reliability of service.
It is perhaps for this reason that customers who are dissatisfied with the service quality and speed of their existing ISP find it desirable to switch to a different provider, usually based on price. But the new provider may also provide a service level that does not meet the customer's needs, and churn begins again almost immediately.
Among the report's key findings for the broadband internet sector:
- Churn is high, and speed is the biggest cause of dissatisfaction, and is the factor which is most likely to fall short of customer expectations;
- The most common causes of dissatisfaction were speed, price, customer service then reliability of service.
- There is no direct relationship between customer satisfaction and continued loyalty;
- Service satisfaction does go some way to moderating switching behaviour, regardless of alternative providers;
- The UK now has over 300 broadband providers and significant levels of infrastructure competition;
- Nearly 90% of internet connections in the UK are being made via broadband.
The study concluded that churn has become a significant issue within the broadband internet sector and others, where the purchase of these products has become increasingly commoditised in recent years.
The research also found that customers expect their service to be reliable above all else when entering into a broadband relationship, with connection speed being the next most important attribute. More than one quarter of customers said the customer service they receive does not match their expectations.
According to Keith Gait, principal consultant for Orchid Consulting, "Broadband companies have got to walk the walk as well as talk the talk. It's no good spending a lot of money on advertising and building a brand if the customer expectations are not met. People aren't afraid of switching if connectivity speed is not up to scratch, and poor customer retention can prove very costly."