Loyalty: Customer Service Outperforms Technology
All those ads touting the latest and greatest wireless communication technologies only amount to so much when it comes to wooing customers. In fact, it’s the service a company provides after getting a customer that determines loyalty.
According to a new study by PwC, having a telecommunications carrier that “offers the latest technology” was important to nearly three-quarters of consumers (73%), but it did not rank among the top attributes thay are important for consumers. In fact, only 7% of more than 1,000 consumers surveyed ranked technology among their top three attributes. (The top three attributes, according to the study, were performance, pricing and service.)
“Customers are less sensitive than one might think about always having access to the latest technologies and the social influences of their friends and family,” Dan Hays, principal and U.S. wireless advisory leader for PwC, tells Marketing Daily. “Increasingly, customers are very well educated and aware of the services that they’re purchasing, and what they’re finding is that they’re able to cut through the hype and whether they’re getting the service that they want. Is it fast? Is it reliable? Do their problems get solved? They want a good value, but value doesn’t always win out.”
Such findings would suggest that telecom companies might be better off investing more in customer service and retention programs and less on acquisition marketing programs. “Companies should consider media strategies that are more focused in message content and tout experience, reliability, and reputation,” according to the report.
“As the [telecom] market matures in the U.S., service providers are looking for opportunities to make sure their customers stay with them because there aren’t many new customers to be had,” Hays says. “When it comes down to it, customer loyalty is about delivering on the basics: offering a good value and being able to support your customers when they need it.”
Still, for those companies bent on pursuing new customer acquisition, messaging focused on price and deals is probably the best tactic, particularly in reaching younger consumers. However, many consumers are still constrained by contracts that limit switching, and most consumers (56%) are not willing to “rent or lease” phones for a less restrictive model, according to the study.
“Termination fees continue to be a strong motivator to loyalty,” Hays says. “[But] I think the biggest impediment to having customers switch is the experience they’re already having. If they’re already having a good experience with their provider, there’s little motivation to change.”