Despite the fact telecommunications are so integral to most of our daily lives — making phone calls, sending texts, using the internet at work and at home — many people feel their experiences with carriers leave much to be desired.
The problem with customer dissatisfaction is that it can fuel churn, or subscribers leaving a service provider — and this phenomenon is very costly, as you can imagine. According to data from Statista, churn rates for telecom companies between 2013 and 2018 ranged from a low of 1.18 percent to a high of 5.61 percent.
Identifying issues is the first step toward addressing shortcomings and boosting customer retention. With that in mind, here are three reasons telecoms experience high customer churn rates.
Reason #1: Low Customer Satisfaction Levels
According to the American Customer Satisfaction Index (ACSI), the telecoms sector ranks substantially lower than many others in the eyes of consumers with a score of 73.1 out of 100. For reference, here are some key sectors ranking higher than telecoms:
- Manufacturing of durable goods: 81.7
- Manufacturing of non-durable goods: 81.1
- Accommodation & Food Services: 79.4
- Finance & Insurance: 78.3
- Retail Trade: 77.4
- Health Care & Social Assistance: 76.5
In fact, the only assessed sector ranking lower than telecoms is Public Administration/Government at 68.4. As you can see, there’s definitely room for improvement in terms of the customer experience in telecoms.
Consider the fact telecoms have long focused on customer acquisition — “Subscribe today and lock in your exclusive low introductory rate!” — rather than retention.
Here’s how the managing director of the ACSI sums up this sector-wide challenge for ZDNet: “If you look at retail, airlines, and many other industries, companies like to reward customer loyalty, offering perks or discounts for doing business with them. Telecom is the exact opposite. In many ways, loyalty is punished because subscription TV is focused on customer acquisition and offering the best deal to lure customers away from competitors. In the long run, that doesn’t leave customers very satisfied.”
Moving forward, telecoms must find ways to not only earn new customers but to build a relationship and foster loyalty over time if they are to be competitive with new innovations in the field. The first step is understanding which factors affect customers’ decisions to stay or go through surveys and customer analytics.
Reason #2: Network Performance Issues
Customers can place a phone call, browse the internet, or send a text without incident 99 times. However, they seem much likelier to remember the one time these services were down or otherwise unavailable.
Telecoms need to stay ahead of performance issues and can use the advanced telecom network analytics available today to expediently identify and troubleshoot problems. Quicker time to insight about performance challenges and patterns allows employees to understand and solve problems affecting customers, which can help companies act right away in terms of mitigating technical issues and implementing long-term fixes.
Reason #3: Stressful/Impersonal Billing Experiences
One consistently frustrating aspect of telecom customer service is billing. Many customers find their bills confusing, erroneous, or impersonal. If you’ve ever received a bill from your wireless or internet provider with charges you didn’t understand, then you’ve likely experienced this irritation firsthand. Many consumers don’t even check their telecoms bills regularly because they’re so used to the exasperating status quo.
The good news? It’s entirely possible to use billing as a means to strengthen customer relationships rather than weaken them. Here are a few examples of how telecom companies are working to improve billing and communications with the goal of reducing churn:
- Cricket Wireless released a video-based campaign called “Let’s Look Inside Your Bucket” to reach consumers with important information, offers, and humor. This approach reduced early churn by 37 percent.
- UK-based “Three” started using bills to demonstrate the value delivered to individual customers, telling them how much they’ve saved through the company’s “Feel at Home” roaming offer.
- Sprint has implemented measures to ensure the first bill consumers receive is consistent with the rates and services promised during the sales cycle. Working quickly within the first 10 days of a new customer relationship to help them understand and verify charges reduces questions and boosts satisfaction.
British Telecom (BT) took these efforts a step farther and partnered with ThoughtSpot to embed advanced billing analytics directly into customer portals. This empowers its subscribers to analyze their usage and payments to find the best-fitting packages, as well as fully understand what they’re paying and why.
Billing is often the glue that holds the customer-telecom relationship together, so companies should capitalize on this opportunity to build loyalty and reduce customer pain points.
Telecoms have historically experienced high customer churn rates, but there are absolutely actions enterprises can take in an effort to maximize customer retention.