AR Mobile A4 0107

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How to generatecustomer loyalty in

mobile markets

Acquisition and Retention Study,March 2009

Global Summary Report

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How to generate customer loyalty in mobile markets2

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 Its 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

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How to generate customer loyalty in mobile markets 3

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 managechurn? 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.

Executive summary

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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.

The study is based on nearly 12,000 interviews and is representative for themarkets 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?

Mobile sample

Field period:12/08 to 02/09

11,866 interviews

Brazil

Fixed sample

Mobile sampleChina

Fixed sample

Mobile sample

United States

Fixed sample

Mobile sample

South Africa

Mobile sample

Indonesia

Mobile sample

Pakistan

Mobile sample

Russia

Mobile sample

United Kingdom

Fixed sample

Mobile sample

Germany

Fixed sample

Figure 1. The Acquisition and Retention study

is based on nearly 12,000 interviews, covering

nine countries.

Objectives and methodology

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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.

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 providerthat 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 subscribers existing CSP is in an ideal position to

influence customer loyalty by delivering a performance that meets or exceeds

subscribers quality requirements.

Figure 2. EBITDA margin is adversely affected

by high rates of churn.

Uninspiring user experiencescreate churn and erode profits

0%

Blended churn rate, 2007

EBITDAmargin

60%0%

30%

40%20% 50%30%10%

60%

20%

50%

10%

40%

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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.

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 customers association with a CSP actually comes

at a cost to the CSP (the customers 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 theirchief sources of dissatisfaction are is critical in deciding what actions need to be

taken to retain them.

Time/customer lifecycle

Positive CLTV

Limited harvestingNegative CLTV

= 5years

Duration of customer relation (%)

Customer life-time value

Total

Brazil

China

Germany

Indonesia

Pakistan

Russia

South Africa

United Kingdom

Critical time window

United States

0

20

40

60

80

100

Figure 3. Managing the customer lifecycle

the most customer churn happens between two

and three years after the initial contract is signed.

n=4229 respondents

When do customers churn?

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There is a clear difference in customer loyalty between mature and emerging

markets. Some 70 percent of users in lightly-penetrated Pakistan wouldnt even

consider using a network other than the one that they are on, while just 15 percent

of German users feel this way.

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 seeingtheir subscriber numbers dropping.

1534

1

2 21 13 1

4

1

6

4

46

Totalin %

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 Dont know

5

70

23

Pakistanin %

6

20 27

46

Brazilin %

8

5336

Russiain %

6 69

39

1

45

Chinain %

9

39

48

South Africain %

15

53

25

Germanyin %

13

56

27

United Kingdomin %

6

5835

Indonesiain %

17

56

20

United Statesin %

1

Figure 4. Customer loyalty is high in emerging

markets but evaporates in more saturated

markets.

n=7637 respondents

Customer loyalty declinesas markets mature

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In all markets, about 59 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.

Dissatisfaction with the former mobile CSP was the number one reason cited by

churners in almost all markets. In other words, users arent just being lured away

by competing offers, theyre 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.

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

7

26

167

Totalin %

Switched less than 6 months ago Switched more than 6 months ago Never Dont know

1. Dissatisfied with my formermobile operator

2. Interesting promotion offer

9

23

69

Brazilin %


2. Wanted to take part in a bonusprogram

520

75

Chinain %


2. Contact by a competing mobileoperator

7

12

4548

United Kingdomin % Recent

switchesRecentswitches

1. Wanted a handset upgrade2. Dissatisfied with my former

mobile operator

9

3555

Germanyin %

1. Contract/pre-pay serviceexpired


5

3558

United Statesin %


2. Contract/pre-pay serviceexpired

Recentswitches

Recentswitches

Recentswitches

Recentswitches

Lack of loyaltytranslates into churn

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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 dont know to

questions about brand. This suggests that users are not paying attention to their

CSPs brand position in the market and/or just dont care about brand.

The number of I dont 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 retentionmethod. 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 dont 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.

Lack of brand awarenessis growing

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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.

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.

Figure 6. The first half of the truth Around

35 percent of churn is triggered by promotional

offers from competitors.

>50

Perceived cost savings (%)5 10 20 30 40 50

Consider churn (% of all customers)Churn or interest in churn due to promotional offerfrom competitor (%)

Germany

Germany

United Kingdom

United States

China

Indonesia

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

34

45

27

44

14

35

25

31

6740

0

20

40

60

80

100

Perceived price differencesof 10% or more trigger churn

The power of promotions

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Many churners are not moving towards a better offer, theyre 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 peoples 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 customercare, 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.

706050403020100

Churners top reasons for dissatisfaction (%)

Mobile serviceoffering

Billing

Costs ofservices

Offered ratepackages

Networkcoverage

Customer careservice

Voice/receptionquality

Churn or interest in churn due to dissatisfaction

with operator (%)

Germany40

5962

015

56

36

169

21

19

48

4850

42

52

28

5727

16

33

32

1532

37

41

123

5

5

4

12

300

11

Germany

United Kingdom

United States

China

Indonesia

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

28

52

28

32

44

34

42

56

47

22

Figure 7. The second half of the truth

Customers churn due to dissatisfaction with

their current CSP.

Dissatisfactiondrives decisions

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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 providers network.

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. Its not just about reducing

churn one customer at a time, its about retaining entire classes or categories of

customers who may begin to consider churning if the word on the street turns

against the CSP.

Salesperson ofa special mobilephone store

Advertisements/promotionsI received

Information inthe Internet

Salesperson ofthe mobile networkcompany store

TV/Radio 22

51

17

21

16

16

40

64

9

21

13

24

Family or friends

in %

Total

n=1179

Brazil

n=222

14

41

11

28

22

12

China

n=117

5

39

35

21

6

13

Germany

n=191

63

68

1

15

4

13

Indonesia

n=112

36

64

2

25

25

14

Pakistan

n=118

13

57

10

20

39

10

Russia

n=99

36

51

2

24

24

33

SouthAfrican=116

6

39

38

14

10

19

UnitedKingdomn=104

8

46

30

15

7

14

UnitedStatesn=100

Figure 8. Around the world, word of mouth is thesingle 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

Its who you know that counts

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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 its 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 users 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.

Figure 9. What makes a loyal customer:

churn drivers for mature markets.

Customer care

Status info aboutinquiry

Competence of staff

Time to solve query

Cost and billing

Voice rates

Suitability of ratepackages

Flat rates for voiceand data

Service & deviceportfolio

Low cost handsetavailability

Relevant handsetavailability

Text and picturemessaging quality

Network andservice quality

Voice quality andstability

Call set-up time

Establishing a dataconnection on the

first try

Momentsof truth

Self-care

Handsetavailability

Handsetcost

Mobile dataservices

Voicequality

Voicecoverage

Data coverageand quality

Callcosts

Mobile

data costs

Billing

Contractstructure

Customer careeffectiveness

Complainthandling

7

7

12

4

2

5

1310

1

17

9

8

4

Customer retention drivers impact in %

What makes a loyal customer?

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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 tothem. 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 care

Competence of staff

Delivered outcome ofrequest

Time to solve request

Cost and billing

Voice rates

Rate understandability


Service & deviceportfolio

Handset cost

Mobile internet

Picture messaging



Indoor coverage

Call set-up time

Momentsof truth

Voicequality

Voicecoverage


CallcostsMobile

data costs

Billing

Contractstructure

33

10

6

11

1814

2

28

124

Handset cost

Mobile data services

Self-care

Complaint handling

Customer care effectiveness



churn drivers in China.

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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.


churn drivers in Indonesia.

Customer care


Delivered outcome

of request Length of timeto solve a problem

Cost and billing

Cost of calls tolandlines

Stability of ratesover time

Calls to othermobile networks

Service & deviceportfolio*



Indoor coverage

Geographiccoverage

Momentsof truth

Self-care

*Note: Handsets not included in surveybecause Indonesian operators do notprovide them

Voicequality

Voicecoverage

Dataquality

Callcosts

Mobiledata costs

Billing

Contractstructure

Customer care

effectiveness

Complainthandling


19

14

9

15

22

21

7

73

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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.


churn drivers in Pakistan.

Customer care


Ease of self-care on

internet Length of timeto solve a problem

Cost and billing

Text message costs

Internationalroaming costs

Cost of calls tolandlines


Picture messaging

Text messaging


Text messagingreliability

Indoor coverage

Voice quality

Momentsof truth

Self-care Mobile data

services

*Note: Handsets not included in surveybecause Pakistani operators do notprovide them

Voicequality

Voicecoverage


Callcosts

Mobiledata costs

Billing

Contractstructure


Complainthandling


11

12

8

13

105

1

14

10

9

6

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Customer care

Ease of self-care oninternet

Delivered outcome

of request Status info aboutinquiry

Cost and billing

Voice rates


Flat rates for voiceand data


Text messaging

Picture messaging

Choice of multimediaand Internet services



Indoor coverage

Establishing a dataconnection on the

first try

Momentsof truth

Self-care

Mobile dataservices

*Note: Handsets not included in surveybecause Russian operators do notprovide them

Voicequality

Voicecoverage

Data coverage

and quality

Callcosts

Mobiledata costs

Billing

Contractstructure


Complainthandling


17

17

10

13

10

31

11

6

7

5


churn drivers in Russia.

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.

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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.

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 dont like how much theyre 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 onchurn, 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.

Contractstructure

100%0%

Satisfaction% of Excellent ratings from customers when asked about their operators current services

Impact

60%0%

10%

40%20%

20%

Mobile dataservices

Mobile datacosts Customer care

effectiveness

Complainthandling


Handsetcost

Handsetavailability

Call costs

Self care

Billing Voice coverage

Voice quality

Operator improvementwill have the greatestimpact on churnreduction in these areas

2621

41

11

Figure 14. Developed Markets: Contract

structures, costs, and customer care are least

satisfying to subscribers.

Pinpointing the most effective strategiesin mature markets

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Overall, users in mature markets are pleased with SMS, MMS and voicemail

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 andDevices. High satisfaction from basic data

services, but consumer desire for a wider

handset choice is not being met.

21

41

11

100%0%


Impact

60%0%

10%

40%20%

20%

Textmessaging

Picturemessaging

Voicemailservice

Choice ofsuitable handsets

Low-costhandsetchoice

Handsetrecyclingservices

Low-radiationhandsetsoffered

Desired brandsoffered

26

Handset costin contract

Good deals for

new and existingcustomers

Service and device portfolio

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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.

2621

41

100%0%


Impact

60%0%

10%

40%20%

20%

Voice callsetup time

Voice stability

SMS and MMS reliability

Geographic coverage

Voice coverage

Mobileinternetspeed

Mobileinternetstability Establishing

data connectionon first try

11

Indoor coverage

Network quality

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Mature markets around the world show a remarkably stable pattern of low

satisfaction with call rates (especially with mobile Internet, data and email costs),

but this dissatisfaction has a low impact on the overall decision to churn. In other

words, customers dont like their call costs or how theyre structured, but this

dissatisfaction in itself is not strong enough to drive churn. This suggests that

dissatisfaction with call costs is universal, and its 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.

2621

11

100%0%


Impact

60%0%

10%

40%20%

20%

Call cost tolandline

Same-network call costTopup voucher denomination

Rate suitability

Rate stabilityData rates

Flat rate options

Email cost

MMS cost

Subscriptionrate

Rate transparency

National call cost to other networks

Bonus programs

Voice rates

Ability to change package

41

SMS costMobileinternet cost

Internationalroaming cost Call cost to

voicemail

Cost and billing

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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.

26

41

11

Cost of customerservice call

100%0%


Impact

60%0%

10%

40%20%

20%

Ease of websiteself-service

Complaintstatus update

Staff friendliness

Staff competence

Achievedoutcomeof requestWebsite

useful forinformation

Helplinewait time

21

Problem resolution time

Customer care

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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 whats 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.

Challenges and opportunitiesfor mobile CSPs

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