Research Report The Connected Consumer Survey 2015: fixed broadband customer retention February 2015 Patrick Rusby and Martin Scott
2 About this report This report focuses on aspects of Analysys Mason s annual Connected Consumer Survey that relate to the behaviour, preferences and future plans of fixed broadband users in France, Germany, Poland, Spain, Turkey, the UK and the USA. Figure 1: Countries covered individually in this report [Source: Analysys Mason, 2015] The survey consists of an online questionnaire, which was conducted in July and August 2014 and had 7485 respondents. The respondents were chosen to be representative of the online population in terms of age, gender and employment status. This report focuses on several issues that are critical to the strategy of fixed broadband operators in 2015. The drivers of churn and approaches to customer retention. UK France Germany Poland USA The USA is also part of this study (not shown to scale). What the Net Promoter Score (NPS) means to operators, and what influences it. 1 Approaches to bundles, particularly fixed mobile convergent bundles, and how they affect customer churn. Spain Turkey 1 NPS is a metric used to calculate customer loyalty and satisfaction. Scores given are between 100 and +100 (see the Methodology slide in this report). NPS, Net Promoter and Net Promoter Score are registered trademarks of Fred Reichheld, Satmetrix, and Bain & Company.
3 Contents Slide no. 6. Executive summary 7. Price is the top driver of churn from fixed broadband services, but speed, reliability and value for money are also important 8. Customer service has the closest relationship with the NPS 9. Different services have different churn rates so operators should create bundles that can help to reduce churn for all services 10. Recommendations 11. Recommendations 12. Drivers of fixed broadband customer churn 13. Price is the top driver of churn from fixed broadband services, but speed, reliability and value for money are also important 14. Younger people prioritise speed and are less price-sensitive than older people when selecting their fixed broadband service 15. NPS increases with advertised broadband speed, but services of 100Mbps and faster may be struggling to meet expectations 16. Key criteria for customer satisfaction 17. Customer service has the closest relationship with the NPS 18. Service providers do not need to get full marks for every aspect of their service to have a positive NPS low prices can prevent dissatisfaction 19. Customer satisfaction varies significantly between service providers: providers with high mobile NPS also scored well for fixed broadband Slide no. 20. AT&T: Attention to customer service has made customers into promoters, but fixed mobile customers are less satisfied than those with just fixed 21. Iliad: Fixed broadband has high customer satisfaction and benefits from loose bundling with low-cost mobile services 22. Turkcell Superonline: Customers were more satisfied than those of their competitors in all measures in our survey 23. Virgin Media: Strongly placed with a fast, reliable network, a strong TV offer and credible quadruple-play bundles 24. Bundling strategies to reduce churn 25. Different services have different churn rates so operators should create bundles that can help to reduce churn for all services 26. Service bundling is not a priority for consumers, but it attracts customers when it is positioned as a route to lower prices and higher-speed services 27. Adding services to a bundle generally improves customer retention, but fixed mobile bundling does require some thought 28. AT&T s results suggest that bundling mobile services with fixed can reduce consumers perception that they are getting a bad deal 29. Fixed mobile bundles have had a significant positive effect on customer retention in Spain and France
4 Contents Slide no. 30. Panel information and methodology 31. Methodology 32. Panel information: France and Germany 33. Panel information: Poland and Spain 34. Panel information: Turkey and UK 35. Panel information: USA 36. About the authors and Analysys Mason 37. About the authors 38. About Analysys Mason 39. Research from Analysys Mason 40. Consulting from Analysys Mason
5 List of figures Figure 1: Countries covered individually in this report Figure 2: Reasons given by respondents who intended to change fixed broadband provider within 6 months Figure 3: Linear regression model for the NPS awarded by respondents for satisfaction with five aspects of their service Figure 4: Intention to churn within 6 months, mobile and TV subscribers relative to fixed broadband, by country Figure 5: Average intention to churn among fixed broadband, mobile and TV customers, by country Figure 6: Reasons given by respondents who intended to change fixed broadband provider within 6 months Figure 7: Criteria by which respondents intend to select their next fixed broadband service, by age Figure 8: Fixed broadband Net Promoter Score by advertised maximum speed of service Figure 9: Linear regression model for the NPS awarded by respondents for satisfaction with five aspects of their service Figure 10: NPS by respondents satisfaction with the speed and price of their fixed broadband service Figure 11: NPS for fixed broadband providers in France, Germany, Poland, Spain, Turkey, the UK and the USA Figure 12: Services taken by AT&T fixed broadband subscribers in our panel Figure 13: Intention to churn of AT&T s fixed broadband customers with and without mobile Figure 14: Services taken by Iliad fixed broadband subscribers in our panel Figure 15: Intention to churn of Iliad s fixed broadband customers with and without mobile Figure 16: Services taken by Turkcell Superonline fixed broadband subscribers in our panel Figure 17: Intention to churn of Turkcell Superonline s fixed broadband customers with and without mobile Figure 18: Services taken by Virgin Media fixed broadband subscribers in our panel Figure 19: Respondents advertised speed by operator, UK Figure 20: Intention to churn within 6 months, mobile and TV subscribers relative to fixed broadband, by country Figure 21: Average intention to churn among fixed broadband, mobile and TV customers, by country Figure 22: Criteria by which respondents intend to select their next fixed broadband service Figure 23: Future (6-month) intentions for fixed broadband, by combination of services bought from the same provider Figure 24: Intention to churn from fixed broadband provider within 6 months, by service combination Figure 25: Intention to churn for customers with bundles of fixed broadband and voice, with and without mobile services, selected operators
36 Executive summary Recommendations Drivers of fixed broadband customer churn Key criteria for customer satisfaction Bundling strategies to reduce churn Panel information and methodology About the authors and Analysys Mason
37 About the author Patrick Rusby (Research Analyst) is the lead analyst for Analysys Mason s SME Strategies research programme, and contributes to the Mobile Services programme within the Consumer research practice. His areas of specialisation for SME strategies are SME technology trends and adoption, enterprise mobility, SaaS and IaaS services for SMEs and unified communications. Within Mobile Services, Patrick focuses on the MVNO market and churn-reduction strategies for operators. Patrick was previously a Research Manager for Knowledge Peers, a peer learning platform helping SME CxOs share best practice in finance, technology and telecoms. He holds a Master s degree in Contemporary British Politics from Goldsmiths College, University of London. Martin Scott (Practice Head) leads Analysys Mason s Consumer Services research practice, which includes the Fixed Broadband and Multi-Play, Next-Generation Services, Mobile Services, Mobile Devices and Digital Economy research programmes. His primary areas of specialisation include the bundling and pricing of multi-play services, including quadruple-play bundling, customer satisfaction and consumer-facing marketing strategy. He also specialises in statistics, surveys and the analysis of primary research; he co-ordinates Analysys Mason's Connected Consumer and Consumer smartphone usage series of research.
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