We see lots of service providers' commericals telling us how high their customer satisfaction rating is and how loyal customers are to them. We see providers such as T-Mobile offering no contract plans and a willingness to pay your early termination fees to other carriers. All of these commercials and statements are designed to show us that hard work and loyalty are factors that lead to retaining customers.
Would you believe the real reason people stay with their current carriers is not great service or a sense of loyalty, but rather fear and burden? After finally getting used to how and where a particular carrier provides service, the fear is that switching will result in less coverage. The burden is that a large number of people find it inconvenient to switch.
This information comes to us from an annual report entitled “The Mobile Loyalty Audit 2014.” This report is produced by WDS, a Xerox Company that provides multi-channel knowledge management, care automation and analytics, in partnership with MobileSquared and GMI. This year’s survey saw the participation 4,000 mobile subscribers.
According to the survey, it does seem that the information being told to us by the carriers is actually a misinterpretation of their satisfaction metrics. They are overestimating what they consider to be their customer loyalty which leads to misdirecting investment in customer retention. While the carriers may think that they are proactively investing in their customers, which in turn, results in their retention, there seems to be very little evidence to suggest that this is true.
Tim Deluca-Smith, who is vice president of marketing at WDS, said “It’s been twelve months since we last ran the Mobile Loyalty Audit and while we have broadened the base to include subscribers from the United Kingdom, United States, South Africa and Australia, many of the issues facing carriers remain. Carriers appear no closer to establishing what customer loyalty actually is, or how to proactively engender it. The data shows that customers avoid switching carriers because of the inconvenience related to technical, social or financial barriers. It has little to do with emotional attachment or loyalty to the brand.”
Some of the highlights of this year’s survey include the following:
- More than a quarter of customers interviewed (26 percent) admit the only reason they stay with their current provider is that switching is “inconvenient”
- 15 percent believe that all mobile carriers are the same and they see no benefit in switching
- Over a third (35 percent) do not want to risk changing carriers for fear of losing coverage
- 55 percent of retained customers say they stay because their current carrier meets their service expectations
- Just 16 percent of mobile consumers feel rewarded for their loyalty
I actually count myself in that last item as part of the 16 percent. I have been an AT&T mobile customer since 1998 and find that I do receive what can be considered rewards. I also put myself in the 35 percent group that fears the loss of coverage. While AT&T is sometimes spotty in my neighborhood, of all the carriers it does provide the best service in my area.
However, this does not seem to be enough. The survey also finds that even if a customer is satisfied, they have no qualms about changing carriers. There appears to be a large gap between what is realized as customer satisfaction and customer retention.
Additional findings from the survey show that:
- Almost one fifth (18 percent) of customers who are considering switching, admitted to being highly satisfied with their current provider
- Less than half of retained customers (44 percent) are highly satisfied
When customers were asked why they intended to switch carriers:
- 54 percent said they didn’t feel valued
- 54 percent cited ineffective rewards and loyalty programs
- 44 percent did not trust their carrier
If you take all of these findings and put them all together, the end result seems to be that regardless of the carrier, customers feel they don’t receive the love they feel they deserve and that leads to a lack of loyalty.
Deluca-Smith concluding by saying, “Many in the industry believe that customer satisfaction automatically translates to retention. This is not true. Certainly, customer satisfaction is correlated to retention and a highly satisfied customer is seven times more likely to be retained, but this cannot be relied upon.”
As you can see from the results of this survey, carriers believe their efforts to keep customers dedicated and satisfied are working. In reality, as I mentioned before, it is really fear and burden that is keeping them from moving anywhere else.
Edited by
Maurice Nagle 
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