Mobile Phone Users Lack Loyalty but Rely Heavily on Services
The world's mobile phone subscribers are likely to become vocal and active detractors if they have a negative customer experience, reveals a new global study by the Chief Marketing Officer (CMO) Council.
Only 34 percent of 1,660 mobile subscribers surveyed around the globe in the second quarter of 2012 are loyal to their mobile service provider and have stayed with their current communications service provider for more than five years.
And this loyalty is increasingly being called into question, as customers grow frustrated with more fees, intermittent quality of service, lack of carrier respect, and the frustration of trying to figure out all the options and features of increasingly complex plans.
According to the Ricoh-sponsored study, 41 percent of mobile phone subscribers say they will lodge a complaint about a poor experience, 36 percent will cancel their service, and 29 percent will tell everyone they know about the incident. Only 29 percent of those polled across all age groups characterized themselves as loyalists. In contrast, a total of 41 percent of respondents said they were either apathetic, on the fence, or just about gone when it comes to the relationship with their mobile service operator.
What's triggering the switching and churn among mobile phone subscribers? Not surprisingly, high service plan costs contributed to 48 percent of departures, a better deal with more all-inclusive options seduced 26 percent of defectors, and poor quality of service, such as dropped calls or bad reception, eroded another 23 percent of subscribers.
"Consumers are seeking fast, reliable, and predictable access to services and experiences they initiate using their mobile devices," noted Liz Miller, Vice President of Marketing Programs for the CMO Council, which represents 6,000 senior marketers controlling some $300 billion in aggregated annual spend. "While they can't live without their mobile devices, they certainly aren't hesitant to vocalize their dissatisfactions and express their freedom of choice in selecting another service provider."
The CMO Council mobile subscriber survey revealed:
- Hidden fees (21%, bad service or network speed (17%, and high data or text costs (17% topped the list of complaints.
- A surprising 56 percent of respondents fail to see equitable value to cost or are unsure of the fees they pay in proportion to the service they receive.
- Few consumers expressed concerns over a lack of online access (6% or paperless billing (3%.
- Consumers are mostly using their phones for calling (84%, texting (73%, taking photos (48%, and going online (39%.
- Service providers seem to be leaving money on the table, as 41 percent of consumers had issues regarding how well they were notified or informed about other products or services.
- While 36 percent of consumers say they will cancel their service after a negative experience, 29 percent believe their carriers simply won't care about their defection.
"Function fatigue and feature frustration once summed up the global consumer's experience with complex, over-engineered mobile devices; now this has become the consumer mindset about their overly complex plans and online account management interface," added Miller. "Consumers are looking for assurance that their longstanding loyalty will be repaid with service and relevant communications instead of paying high fees to receive enhanced web services."
As part of its joint study with Ricoh, the CMO Council also surveyed 147 marketers at communications service providers (CSPs) worldwide. Most appear to be focused on better segmenting, targeting, communicating, and delivering service to their customers. There is a keen awareness among those surveyed for the report that their subscribers want lower-fee plans with higher-touch, personalized service, yet a majority of marketers in these organizations still feel that technology innovation and advancement will satisfy subscribers and grow loyalty. Ironically, only 13 percent of consumers described themselves as technology fiends, eagerly awaiting new innovations to secure their loyalty.
"Mobile communications service providers do not lack data," commented George Promis, Vice President of Continuous Forms Production Solutions & Technology Alliances, Ricoh. "In fact, mobile carriers likely have more customer data than they might realize -- all of which can and should be leveraged to create more revenue streams and increase customer loyalty. Without this data, executing the relevant exchanges that consumers are demanding is nearly impossible. Moreover, access to this invaluable data presents telco marketers with a tremendous opportunity to retain highly loyal and enthusiastic customers who admit they are hooked on mobile. It will be the marketer's game to lose."