Mobile customers rarely speak about their carriers with affection or loyalty. Though many own tablets and smartphones, few view provider relationships as anything more than necessity. But, as larger carriers begin to level the playing field by offering similar rates and devices, the mobile industry must look for innovative ways to revolutionize and refresh these stale consumer perceptions.
"Many consumers are only tied to their mobile carriers by the red tape of their contracts as opposed to a sense of brand loyalty or engagement," says Berkley Charlton, managing director, enterprise location intelligence at Pitney Bowes. "These relationships are tenuous at best and easily rocked by the offer of a new deal or a decline in network service. When price is the only differentiator, it's tough for mobile carriers to move customers from commodity status to something stickier."
Because many consumers believe their provider thinks of them as nothing more than data points, not human beings, mobile carriers have a long road ahead, for they must proactively counteract these views in an effort to regain customer trust and loyalty.
How Customer Service Impacts Mobile Carrier Relationships
No matter the mobile carrier, customer service remains the most important component for long-term success. Though most consumers believe such relationships to be a necessary evil, carriers must work to build closer bonds if they are to reinvent the way users perceive their service.
"In many markets, consumers have also burned their fingers historically on prices that were higher than anticipated, coverage areas that weren't as expected, or contracts that had longer notice periods than necessary," says Fredrik Jungermann, managing director at tefficient. "Consumers are, therefore, not always trusting of carriers and can be of the belief that 'everyone is average' and that only price matters."
As Jason Somerset, director of product services at Bandwidth, notes, mobile carriers must hone their customer-centric approach, for technology and innovation have brought the conversation face-to-face. Thus, mobile carriers must actively listen and react to customer input now more than ever. After years of restrictive cellular plans and pricing structures, consumers are extremely open to lower costs and greater trust. Therefore, carriers need to be present for the conversation that's happening, as the customer service element boils down to a human-to-human conversation and interaction-something refreshing in an otherwise stagnant industry. Allowing the consumer to be part of the process, while offering the flexibility to change or alter their personal experience, will be vital to prevent attrition in the future.
Carriers understand the potential revenue opportunities based on customer lifetime value, and that winning over a customer from the competition has significant promise. But many fail to think beyond acquisition, leaving most to operate within an industry that treats new customers better than existing ones. For instance, the benefits of introductory bundles typically outweigh those offers presented down the road. Yet such strategies don't make sense since the carrier can track records for every existing customer, calculating any associated risk-an element that's more or less absent for new customers.
"Another critical metric that must not be ignored is First Call Resolution (FCR)," says Anna Convery, executive vice president of OpenSpan. "When a customer calls in to the contact center, the agent should have the resources and customer intelligence at their fingertips to be able to resolve their issue during that single call so that the customer doesn't have to call back into the contact center. If your FCR rate is 50 percent, then for every 20 calls that come in, 10 are resolved in a single call and another 10 are calling back to the center. It's inefficient and costly from an operations standpoint, but it's even more detrimental to your customer retention goals considering the likelihood for a customer to defect to a competitor is greater if their problem isn't resolved after the first call."
Carriers must come to understand customers and their journey so they may pinpoint what triggers churn, identifying behavioral patterns in an effort to establish the best way to retain customers and make them happy. Charlton echoes this sentiment by emphasizing that, in today's saturated market, sustainable revenue through customer acquisition no longer stands as an effective strategy. Instead, carriers must pay equal if not greater attention to customer retention, for success ultimately comes down to customer lifetime value and loyalty. Not all customers are equally profitable, however. Carriers often waste time on customers who won't be impacted by their marketing efforts. Thus, providers must leverage detailed customer data to target those who'll be most receptive, bypassing those who will churn regardless and those who may react negatively or indifferently in order to focus time and attention on consumers who will increase revenue and maintain brand loyalty.
What Smaller Carriers Are Doing to Generate Revenue
While the average mobile telecom customer does business with one of the industry's larger carriers, few value their relationship. In fact, most feel that these major corporations don't truly care or value them, the customer, in return. Thus, many are turning to smaller carriers in an effort to turn things around.
"Too often, the average mobile consumer settles for status quo-at least with the big national carriers-in terms of customer service, pricing, and contracts," Somerset says. "There's little-to-no innovation, no personalization in service, and little compromise on plans and devices. Consumers put up with this simply because they think they have no other option, except maybe prepaid phones. But the carrier landscape is changing, and small players are beginning to challenge big telco, both in service plans and devices, as well as in how they interact with their customer base."
Smaller players have typically used price as their primary differentiator, but the modern data usage boom has created new opportunities to offer more for less in bundles. By giving consumers more data for the same price as their larger competitors, smaller carriers have the chance to attract customers that are interested in mobile data and will likely continue to be high-usage consumers in the future. Smaller carriers may also benefit from internal data as it pertains to retaining existing customers, for such granular data can be used to personalize retention and upsell offers in ways larger carriers often ignore.
However, as Lauren Smith, vice president of business solutions at ClickFox, highlight, disruptive industry strategy and innovation will only get the smaller carriers so far, as larger carriers tend to own more of the airwaves, thereby leaving smaller carriers at a disadvantage, for most lack access to the spectrum and frequencies wearables and sensors require.
But, despite such technological setbacks, smaller carriers are making the most of what they have by introducing revolutionary concepts that break the established mold. Though not for everyone, these smaller providers offer services that allow consumers to explore potential alternatives to the traditional carrier-customer relationship:
- FreedomPop-Provides consumers with the base 500MB of 4G data, unlimited texts, and 200 voice minutes for free each month, with the option to expand usage for a minimal fee depending on their need. Enabling users to connect via VoIP aims to reduce costs and free customers from the hassle of the common contract.
- Ting Mobile-Charges customers for each voice minute, text message, and megabyte separately. Users may choose their desired plan via Ting's cost calculator, allowing them to select from bundles size XS to XXL. Then, at the end of each month, Ting credits consumers for what they don't use and charge for any overages without any additional penalty fees.
- Republic Wireless-Offloads calls and texts to Wi-Fi whenever possible, allowing consumers to reduce their 4G usage and limit costs. Plans start at $5 and afford customers access to some of today's most popular phone models, such as the Moto X, at lower prices than Sprint, the brand's partner, currently offers consumers.
- Giv Mobile-Plays off the no-contract trend by providing consumers with unlimited access to its 4G GSM network for $29. Yet, while Giv also offers a variety of phones, including the ability to carry over an unlocked GSM phone, the brand differentiates itself from the competition by donating 8 percent of each customers' monthly bill to their charity of choice.
Though new devices with more attractive features are introduced at a faster pace than ever before, the future of mobile lies beyond its networks and its phones. As Smith highlights, such components will only grow cheaper and faster as time passes. Instead, the future lies with data, as this factor will inevitably enhance lifestyle, improve health alternatives, provide better shopping experiences, collect more and different data to give back to consumers and make lives better to generate new revenue streams. Consumers wish to sustain their digital connection 24/7, and mobile carriers are positioned to meet this demand as the need expands.