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March 18, 2013

New Study Reveals Crippling Loyalty Among Wireless Customers

Brand loyalty and customer satisfaction is on the minds of wireless service providers. With emerging technology and low-cost options, the ability to keep customers satisfied is critical. Unfortunately, according to a recent study on loyalty among mobile phone users in the United States, loyalty is decreasing.

The study released by WDS, called “WDS Mobile Loyalty Audit 2013,” uncovered that 36 percent of U.S. customers are thinking about leaving their current mobile service provider in the next 12 months. The study also found that 13 percent of customers showed a glimpse of loyalty that would deter them away from competition brought on by other service providers.

While some believe that price, availability of devices and network coverage are the common reasons why customers decide to switch service providers, “at-risk” customers are actually satisfied with their service provider.

In fact, 35 percent believe they got less value for their money, 18 percent believe network coverage was poor and 15 percent considered the availability of devices unsatisfactory. 

Service providers need to make their customers feel valued and reward them for remaining loyal. Forty percent of “at-risk” customers feel undervalued and unrewarded. Data showed that customers are twice as likely to switch service providers if they feel this way.

“Building trust, developing a sense of value and sustaining strong customer service is fundamental to securing long-term loyalty – especially given the level of parity that exists between carriers’ pricing strategies and network performance,” said Tim Deluca-Smith, vice president of marketing at WDS. 

Increase in price is also a determining factor. When asked if their current service provider were to increase prices by 10 percent, 69 percent of customers who were not planning on switching, would consider, while 15 percent said they would switch immediately and 70 percent of satisfied customers would consider switching and 17 percent of satisfied customers would leave.

In terms of a security breach, 78 percent of customers who were not planning to switch would now consider, while 27 percent would switch immediately and 29 percent of satisfied customers would switch immediately.

“We’ve been measuring loyalty in a vacuum; allocating budget based on customer sentiment and an out-of-date notion of loyalty,” said Deluca-Smith.

 “A customer might say that he is satisfied or that she has no intention of switching, but how does that sentiment change when there’s a network outage or monthly price increase? Loyalty means more than just a customer’s intent to repurchase. Based on our research, this is only as good as the next handset subsidy or price discount. True loyalty creates customers who are forgiving when things go wrong and resistant to competitive offers.”

Edited by Braden Becker

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