Loyalty becomes top priority for mobile networks

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By: Wise Marketer Staff |

Posted on December 21, 2011

Loyalty becomes top priority for mobile networks

Customer retention and customer loyalty have become top business growth priorities among mobile network providers, having identified a pressing need to engage customers sooner to help prevent churn and gain a more a holistic view of the customer to provide what each customer actually needs, according to a survey published by customer experience specialist Amdocs.

With 66% of telephone service operators believing that customers are less loyal today than they were two years ago, 70% cited customer retention or customer loyalty as the most critical factor for driving future growth, suggesting the need for a strategic shift in marketing strategy from customer acquisition to long-term customer engagement.

Due to market saturation and increasing competition, 82% of service providers said that customer loyalty programmes would be "very important" or "important" to their company's strategy over the next five years.

Among the key findings of the survey:

  1. Too little, too late Two thirds (65%) of service providers said they initiate a retention programme only when the customer has started the process of leaving, and 90% measure customer loyalty purely by churn rates.  
  2. Customer loyalty misconceptions Service providers saw service quality (97%), network coverage (95%), network capacity (92%) and customer care (86%) as the key drivers behind customer loyalty. Yet in a separate Amdocs consumer survey, network coverage and good customer care are regarded by consumers as basic service requirements and do not comprise competitive differentiators. Two thirds of consumers stated that it was personalised and tailored services, proactive care and rewards for being loyal customers that would win their loyalty.  
  3. Organisational challenges still block loyalty initiatives Service and knowledge consistency across channels (94%), the ability to offer simple, transparent pricing (94%) and creating one integrated customer profile (89%) are regarded as vital in supporting customer retention and loyalty strategies over the next five years. But only 21% of service providers say they have the necessary collaboration today between their IT and customer retention and loyalty departments to enable this.  
  4. Different regions, different churn trends Most regions show a linear growth trend in customer churn, with higher prepaid penetration regions facing the biggest customer loyalty challenge. The North American market, despite arguably facing the largest competitive threat, is the one market bucking this trend. The service providers in this region have adopted loyalty programmes centred on building a complete view and more in-depth knowledge of their customers, while also initiating loyalty programmes tailored to the individual. Respondents in Europe and emerging markets identified this as the approach they would need to take to compete more effectively.

Consumers have many competitors to choose from, and service providers will need to rely heavily on loyalty strategies to combat aggressive offers to lure subscribers away in saturated markets. Customer retention and loyalty - far from being a cost centre - will quickly become a new centre of corporate growth, as long as operators understand what their customers really want and create offers that address those needs in a timely, relevant and well-targeted way.

But perhaps most importantly, customer retention and loyalty programmes need to be introduced very early in the customer lifecycle, and maintain a constant and consistent presence throughout the entire customer relationship.

"The only way to earn loyalty is through deeper customer engagement. Customers demand a high quality experience across all touch points, starting with their first service experience and continuing over the course of the customer's lifetime," concluded Rebecca Prudhomme, vice president of product and solutions marketing for Amdocs. "To do this, service providers must look at the customer holistically and provide them with a simple, proactive, personalised and consistent experience across all channels of interaction."

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