With customers, it is probably always like this: some are not happy, some are ok, others feel they get all they had hoped for, and some just love you.
Customers of mobile telecom providers are not different, but their suppliers are: they constantly try to buy customers away from competitors, which keeps loyalty on a low level and value perception one-dimensional . But even in such a market, loyalty can just come from providing what customers want, as the Canadian provider Telus has shown (Telus are not part of this analysis). Just by not losing customers, they have grown from 4th to 2nd supplier within 5 years.
In the Americas, more than 15% of customers say they stay with their providers just out of laziness, although they should churn. Some 10% say they will switch anyway. In terms of service quality, we see that in total some 25% of subscribers don’t feel at home with their providers. Let’s look at them as to be the churners.
More than 40% however find ok what they get, so that here is no reason to switch. That means these 40% are over the edge of shopping around finding better conditions elsewhere.
Finally, in the Americas, some 28% of mobile users find that they have found the place they were looking for, and say, ‘here I get the best service available’. This is a quality level that providers should want to achieve to secure the investment in their customer base.
But what is stronger than real love, real emotions? Nearly 9% of customer are fans of their providers. This is a real asset. Fans not only are good promoters, they are also able to suffer, because the emotional links are especially strong.
The US providers do it the best. They achieve an impressive 17% of fans. This certainly is an asset. How do the US providers do this? We will find out more, and will provide something like a recipe, in a special chapter.
Looking at quality evaluation again, how to measure customer success in terms of loyalty? Here our approach: we will take the rate of customers who feel that the ‘service fits in the best way’, add on the ‘fans’, and compare this package of ‘fit & fan’ to the low side. At the bottom, definite churners and lazy ‘would be churners’ will be summed up and compared to that number. Fit&fan against churn candidates, will be the indicator. However, not to fall into the NPS trap (who don’t consider the middle, even if it is large), we will adjust the figure for the rate of convinced customers (’fit’) to ‘ok’ customers. The success in marketing shows at this specific point.
So we distinguish between churners, ok (no reason to switch) and fit & fan. For all of the Americas, thid table shows the differences between the countries.
Here are the results:
Colombia is the average Americas country, with a quarter of churners, a good third of fit&fan, and some 40% of ‘no reason to switch’. Brazil suffers from a high churn rate, and Argentina additionally from a low level of fit&fan. But also the Peruvian providers suffer from churn, whereas the US shows the best performance as well as low churn rate, as a high fit&fan level, leading with a loyalty index of 23,8.
But how does that break down into operators and their performance comparison?
Let’s resume: we define performance to be how many more fit&fan customers we have than churners (leaving, or should leave), corrected for how many no reason customers we have against fit&fan customers. We would want to have more of the second, active loyalists, against passive ones. The better the relation, the higher the ranking.
Bitel in Peru is the winner, sending Virgin Mobile in Colombia to the second place, but with a distance to the third, Entel in Peru. These are not only price warriors. This fact alone would show a high no reason rate. But they accumulate a high rate of subjective quality in the fit&fan class. Virgin and Entel lose out because of their price focus: price driven customers are also driven away by pricing of competitors. A high rate of no reason is the consequence, no reason stands for, there might be one tomorrow.
The next performance category is formed by the US carriers. They all succeed in combining low churn rates with high fit&fan levels, This is true in first respect for the two market leaders, Verizon, and AT&T. T-Mobile on the other side, polarizes more, in their customer base, whereas Sprint suffers from a high rate of indifferent customers.
The lower end of the provider performance hierarchy is populated by carriers from Brazil and Argentina.