How to generate customer loyalty in mobile markets. Acquisition and Retention Study, March 2009 Global Summary Report

Transcription

1 How to generate customer loyalty in mobile markets Acquisition and Retention Study, March 2009 Global Summary Report

2 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 It s 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 2 How to generate customer loyalty in mobile markets

3 Executive summary 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 manage churn? 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. How to generate customer loyalty in mobile markets 3

4 Objectives and methodology 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. Figure 1. The Acquisition and Retention study is based on nearly 12,000 interviews, covering nine countries. United Kingdom Mobile sample Fixed sample United States Mobile sample Fixed sample Germany Mobile sample Fixed sample Russia Mobile sample Pakistan Mobile sample China Mobile sample Fixed sample Brazil Mobile sample Fixed sample Indonesia Mobile sample Field period: 12/08 to 02/09 11,866 interviews South Africa Mobile sample The study is based on nearly 12,000 interviews and is representative for the markets 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? 4 How to generate customer loyalty in mobile markets

5 Uninspiring user experiences create churn and erode profits 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. Figure 2. EBITDA margin is adversely affected by high rates of churn. 60% 50% 40% EBITDA margin 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% Blended churn rate, % 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 provider that 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 subscriber s existing CSP is in an ideal position to influence customer loyalty by delivering a performance that meets or exceeds subscribers quality requirements. How to generate customer loyalty in mobile markets 5

6 When do customers churn? 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. Figure 3. Managing the customer lifecycle the most customer churn happens between two and three years after the initial contract is signed. Duration of customer relation (%) 100 n=4229 respondents Total Brazil China Germany Indonesia Pakistan Russia South Africa United Kingdom United States 20 Critical time window 0 <= 1 month < 2 months < 3 months < 6 months 6 to 12 months 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years >= 5 years Customer life-time value Negative CLTV Positive CLTV Limited harvesting Time/customer lifecycle 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 customer s association with a CSP actually comes at a cost to the CSP (the customer s 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 their chief sources of dissatisfaction are is critical in deciding what actions need to be taken to retain them. 6 How to generate customer loyalty in mobile markets

7 Customer loyalty declines as markets mature There is a clear difference in customer loyalty between mature and emerging markets. Some 70 percent of users in lightly-penetrated Pakistan wouldn t even consider using a network other than the one that they are on, while just 15 percent of German users feel this way. Figure 4. Customer loyalty is high in emerging markets but evaporates in more saturated markets. n=7637 respondents Total Brazil China Germany Indonesia Pakistan Russia South Africa United Kingdom United States 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 Don t know 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 seeing their subscriber numbers dropping. How to generate customer loyalty in mobile markets 7

8 Lack of loyalty translates into churn In all markets, about 5 9 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. 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 Total Recent switches Brazil Recent switches China Recent switches 1. Dissatisfied with my former mobile operator 2. Interesting promotion offer 1. Interesting promotion offer 2. Wanted to take part in a bonus program 1. Dissatisfied with my former mobile operator 2. Contact by a competing mobile operator Germany 9 Recent switches United Kingdom 7 Recent switches United States 5 Recent switches Contract/pre-pay service expired 2. Interesting promotion offer 1 1. Wanted a handset upgrade 2. Dissatisfied with my former mobile operator 1. Dissatisfied with my former mobile operator 2. Contract/pre-pay service expired 2 Switched less than 6 months ago Switched more than 6 months ago Never Don t know Dissatisfaction with the former mobile CSP was the number one reason cited by churners in almost all markets. In other words, users aren t just being lured away by competing offers, they re 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. 8 How to generate customer loyalty in mobile markets

9 Lack of brand awareness is growing 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 don t know to questions about brand. This suggests that users are not paying attention to their CSP s brand position in the market and/or just don t care about brand. The number of I don t 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 retention method. 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 don t 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. How to generate customer loyalty in mobile markets 9

10 The power of promotions 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. Churn or interest in churn due to promotional offer from competitor (%) Germany *Within last 6 months Churners* 34 All customers 45 Consider churn (% of all customers) 100 Perceived price differences of 10% or more trigger churn 80 United Kingdom Churners* All customers United States Churners* All customers China Churners* All customers Indonesia Churners* All customers Germany United Kingdom 20 United States China Indonesia Perceived cost savings (%) >50 Figure 6. The first half of the truth Around 35 percent of churn is triggered by promotional offers from competitors. 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. 10 How to generate customer loyalty in mobile markets

11 Dissatisfaction drives decisions Many churners are not moving towards a better offer, they re 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 people s 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 customer care, 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. Churn or interest in churn due to dissatisfaction with operator (%) Churner s top reasons for dissatisfaction (%) Germany 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 Voice/reception quality Customer care service Network coverage Offered rate packages Costs of services Billing Mobile service offering Germany United Kingdom United States China Indonesia Figure 7. The second half of the truth Customers churn due to dissatisfaction with their current CSP. How to generate customer loyalty in mobile markets 11

12 It s who you know that counts 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 provider s network. Total n=1179 Brazil n=222 China n=117 Germany n=191 Indonesia n=112 Pakistan n=118 Russia n=99 South Africa n=116 United Kingdom n=104 United States n=100 Family or friends TV/Radio Salesperson of the mobile network company store Information in the Internet Advertisements/ promotions I received Salesperson of a special mobile phone store Figure 8. Around the world, word of mouth is the single 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 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. It s not just about reducing churn one customer at a time, it s about retaining entire classes or categories of customers who may begin to consider churning if the word on the street turns against the CSP. 12 How to generate customer loyalty in mobile markets

13 What makes a loyal customer? 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 it s 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 user s 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. Customer retention drivers impact Customer care Status info about inquiry Competence of staff Time to solve query Customer care effectiveness Complaint handling 9 8 Selfcare 4 Handset availability 7 7 Handset cost 12 Mobile data services Service & device portfolio Low cost handset availability Relevant handset availability Text and picture messaging quality Cost and billing Voice rates Suitability of rate packages Flat rates for voice and data Contract structure 17 Billing 1 10 Mobile data costs Moments of truth 13 Call costs Voice quality Voice coverage Data coverage and quality Network and service quality Voice quality and stability Call set-up time Establishing a data connection on the first try Figure 9. What makes a loyal customer: churn drivers for mature markets. How to generate customer loyalty in mobile markets 13

14 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 to them. 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 retention drivers impact Customer care Competence of staff Delivered outcome of request Time to solve request Self-care Complaint handling Customer care effectiveness Contract structure Handset cost Mobile data services 10 Voice quality 6 Voice coverage Service & device portfolio Handset cost Mobile internet Picture messaging Moments of truth 11 Data coverage and quality Cost and billing Voice rates Rate understandability Suitability of rate packages Billing 2 14 Mobile data costs 18 Call costs Network and service quality Voice quality and stability Indoor coverage Call set-up time Figure 10. What makes a loyal customer: churn drivers in China. 14 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. Customer retention drivers impact Customer care Status info about inquiry Delivered outcome of request Length of time to solve a problem Customer care effectiveness Complaint handling 7 7 Selfcare 3 19 Voice quality Service & device portfolio* Cost and billing Cost of calls to landlines Stability of rates over time Calls to other mobile networks Contract structure Billing Mobile data costs Moments of truth 15 Call costs 9 14 Data quality Voice coverage *Note: Handsets not included in survey because Indonesian operators do not provide them Network and service quality Voice quality and stability Indoor coverage Geographic coverage Figure 11. What makes a loyal customer: churn drivers in Indonesia. How to generate customer loyalty in mobile markets 15

16 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. Customer retention drivers impact Customer care Status info about inquiry Ease of self-care on internet Length of time to solve a problem Cost and billing Text message costs International roaming costs Cost of calls to landlines Customer care effectiveness Contract structure Complaint handling Billing Mobile data costs Selfcare 6 Moments of truth 10 Call costs 11 Mobile data services Voice quality Data coverage and quality Voice coverage Service & device portfolio* Picture messaging Text messaging *Note: Handsets not included in survey because Pakistani operators do not provide them Network and service quality Text messaging reliability Indoor coverage Voice quality Figure 12. What makes a loyal customer: churn drivers in Pakistan. 16 How to generate customer loyalty in mobile markets

17 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. Customer retention drivers impact Customer care Ease of self-care on internet Delivered outcome of request Status info about inquiry Customer care effectiveness Complaint handling 6 7 Selfcare 5 17 Mobile data services Service & device portfolio* Text messaging Picture messaging Choice of multimedia and Internet services Contract structure 11 Moments of truth 17 Voice quality *Note: Handsets not included in survey because Russian operators do not provide them Cost and billing Voice rates Suitability of rate packages Flat rates for voice and data Billing Mobile data costs 1 3 Call costs Data coverage and quality 10 Voice coverage Network and service quality Voice quality and stability Indoor coverage Establishing a data connection on the first try Figure 13. What makes a loyal customer: churn drivers in Russia. How to generate customer loyalty in mobile markets 17

18 Pinpointing the most effective strategies in mature markets 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. Figure 14. Developed Markets: Contract structures, costs, and customer care are least satisfying to subscribers. 20% Contract structure Operator improvement will have the greatest impact on churn reduction in these areas Call costs Impact 10% Handset availability Mobile data costs Handset cost Mobile data services Customer care effectiveness Complaint handling Self care Data coverage and quality 0% 0% Billing Voice quality Voice coverage 20% 40% 60% Satisfaction % of Excellent ratings from customers when asked about their operator s current services 100% 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 don t like how much they re 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 on churn, 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. 18 How to generate customer loyalty in mobile markets

19 Service and device portfolio Overall, users in mature markets are pleased with SMS, MMS and voic 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 and Devices. High satisfaction from basic data services, but consumer desire for a wider handset choice is not being met. 20% Voic service Picture messaging Text messaging Impact 10% Low-radiation handsets offered Handset recycling services Low-cost handset choice Good deals for new and existing customers Choice of suitable handsets Desired brands offered Handset cost in contract 0% 0% 20% 40% 60% Satisfaction % of Excellent ratings from customers when asked about their operator s current services 100% How to generate customer loyalty in mobile markets 19

20 Network quality 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. 20% Impact 10% Mobile internet stability Mobile internet speed Voice call setup time Establishing data connection on first try Indoor coverage Voice coverage SMS and MMS reliability Voice stability Geographic coverage 0% 0% 20% 40% 60% Satisfaction % of Excellent ratings from customers when asked about their operator s current services 100% 20 How to generate customer loyalty in mobile markets

21 Cost and billing Mature markets around the world show a remarkably stable pattern of low satisfaction with call rates (especially with mobile Internet, data and costs), but this dissatisfaction has a low impact on the overall decision to churn. In other words, customers don t like their call costs or how they re structured, but this dissatisfaction in itself is not strong enough to drive churn. This suggests that dissatisfaction with call costs is universal, and it s 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. 20% Impact 10% 0% 0% cost Ability to change package Flat rate options Mobile internet cost International roaming cost Voice rates Data rates MMS cost Call cost to voic Subscription rate Rate suitability Rate transparency Rate stability SMS cost Call cost to landline Same-network call cost Topup voucher denomination National call cost to other networks Bonus programs 20% 40% 60% Satisfaction % of Excellent ratings from customers when asked about their operator s current services 100% How to generate customer loyalty in mobile markets 21

22 Customer care 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. 20% Impact 10% Complaint status update Ease of website self-service Helpline wait time Problem resolution time Staff competence Achieved outcome Website of request useful for information Staff friendliness Cost of customer service call 0% 0% 20% 40% 60% Satisfaction % of Excellent ratings from customers when asked about their operator s current services 100% 22 How to generate customer loyalty in mobile markets

23 Challenges and opportunities for mobile CSPs 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 what s 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. How to generate customer loyalty in mobile markets 23

24 Nokia Siemens Networks Corporation P.O. Box 1 FI NOKIA SIEMENS NETWORKS Finland Visiting address: Karaportti 3, ESPOO, Finland Switchboard Product code B B EN Indivisual Copyright 2009 Nokia Siemens Networks. All rights reserved. A license is hereby granted to download and print a copy of this document for personal use only. No other license to any other intellectual property rights is granted herein. Unless expressly permitted herein, reproduction, transfer, distribution or storage of part or all of the contents in any form without the prior written permission of Nokia Siemens Networks is prohibited. The content of this document is provided AS IS, without warranties of any kind with regards its accuracy or reliability, and specifically excluding all implied warranties, for example of merchantability, fitness for purpose, title and non-infringement. In no event shall Nokia Siemens Networks be liable for any special, indirect or consequential damages, or any damages whatsoever resulting form loss of use, data or profits, arising out of or in connection with the use of the document. Nokia Siemens Networks reserves the right to revise the document or withdraw it at any time without prior notice. Nokia is a registered trademark of Nokia Corporation, Siemens is a registered trademark of Siemens AG. The wave logo is a trademark of Nokia Siemens Networks Oy. Other company and product names mentioned in this document may be trademarks of their respective owners, and they are mentioned for identification purposes only.