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Social Media Changing Customer Expectations

mobile/social network (twitter)Meeting radically changing customer expectations is a massive and snowballing challenge for established players in the global communications industry, confirms a new study from the CMO Council and its Customer Experience Board.

The convergence of new, free or low-cost interactive digital media channels, social networks and online communities and mobile messaging devices are not only empowering consumers to bypass once-dominant services and channels, but establishing content-based relationships with which more traditional players cannot currently compete, according to the report.

For the study, online audits and one-on-one qualitative interviews were conducted with more than 140 industry marketers in the telecom, wireless, cable, satellite, broadcast and Internet service provider sectors.

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Incumbent communications providers are struggling to adapt to increased innovation, growing price pressures and heightened competition from new and adjacent market entrants, and to differentiate themselves in a crowded, increasingly commoditized market, sums up CMO Council Executive Director Donovan Neale-May.

Expectations for always-on access to content on every device and more personalized on-demand services and experiences are forcing service providers to re-think their operational structures, product portfolios, customer handling systems, and strategic partnerships and investments.

"With the broadband connectivity and mobile devices revolution, fewer and fewer consumers -- particularly among the younger population -- are connecting from home," Neale-May observed to Marketing Daily. They are producing and sharing content in a closed environment through social media networks, and the more content they produce and publish on such networks, the more dependent they become on them."

In addition, "the gratification level is much higher," he points out. Expectations for always-on access to content on every device and more personalized on-demand services and experiences are forcing service providers to rethink their operational structures, product portfolios, customer handling systems, and strategic partnerships and investments.

Nearly half (47%) of marketer respondents said that the growth of social networking and user-generated content represent the most significant digital lifestyle shift affecting the communications market.

Other highlights from the "Service Invention to Increase Retention" report:

* 84% reported that the costs of acquiring and sustaining customer relationships are increasing for their organizations, and 63% reported rising customer churn and attrition. The biggest contributors to customer losses are competitive offerings, pricing or fee structures and inadequate customer service.

* The biggest sources of customer dissatisfaction are unmet needs and expectations (59%), product/service usability and complexity complaints (43%), billing errors (40%), and lack of quality or relevancy of service/product offerings (32%).

* More than half said their company cultures and structures are not aligned around the customer, and that business practices and personnel are not customer-friendly. Not surprisingly, more than half also said that responses to customer dissatisfaction or "pain" are not up to par, and 89% said their organizations need to improve customer handling and response.

* Misalignments between marketing and IT stand in the way of gathering and analyzing customer information -- optimizing go-to-market strategies and new product launches, as well as improving customer acquisition and relationship management programs. More than 60% of marketers say they provide strategic direction for systems investments, and 73% said they expect back-office systems to enable faster, more effective implementation of marketing strategies. Yet more than a third reported that deficiencies in IT, back-office or operational systems are subverting marketing claims and failing to meet customer expectations.

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