• March 17, 2011
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Market Focus: Telecommunications—Rewards for Reliability

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New research from Accenture points to a growing market for loyalty programs among telephone and Internet service providers, and customers seem ready to let carriers shower them with rewards.

According to Accenture’s Global Consumer Survey, customer participation in loyalty programs from wireless carriers grew from 19 percent in 2009 to 31 percent in 2010. Loyalty program participation from landline home phone carriers grew from 14 percent in 2009 to 24 percent in 2010, and participation from ISPs grew from 18 percent in 2009 to 29 percent in 2010.

The most common loyalty programs among telcos and ISPs offered points for merchandise or access to music and entertainment, such as concert or movie tickets, music downloads, or movie rentals. “These loyalty programs offer carriers a proactive way to offer tailored and specific rewards to customers, such as early access to content when it becomes available,” says Robert Wollan, global managing director of CRM at Accenture.

Accenture’s research also indicated  the percentage of wireless customers who were persuaded to stay with a company as a result of loyalty programs increased from 45 percent in 2009 to 53 percent in 2010. Among landline customers, the numbers increased from 41 percent in 2009 to 47 percent in 2010. ISPs saw those numbers jump from 46 percent in 2009 to 53 percent in 2010.

“In telecom, about a third of all customers belong to a loyalty program, but it’s a dominating factor in their decisions to stay with the company,” Wollan says.

This shows that both the participation in loyalty programs and the effectiveness of those programs have increased, the report concludes.
Persuading customers to stay with a company is huge in telecommunications, as 17 percent of ISPs, 14 percent of landline  customers, and 19 percent of wireless customers stopped doing business with a company during the past six to 12 months. In addition, 17 percent of ISP customers, 17 percent of landline phone customers, and 19 percent of wireless phone customers continued doing business with one company but turned some services over to another provider.

“It doesn’t sound like a lot, but it’s a big deal when you consider the size of the industry,” Wollan says.

In fact, telcos ranked just slightly below banks (at 22 percent) and retail stores (at 29 percent) when it came to customer churn.
Telephone number portability—the ability to keep the same phone number when switching service providers—removed a significant barrier to switching telcos, Wollan says, but more often than not, the deciding factor was a company’s customer service.

There, ironically, many telcos and ISPs fell short, according to the report. In the telecom industry, as in just about every other vertical considered, customer satisfaction continued to decline, the research shows. Accenture looked at 11 factors when scoring this metric:

•    having polite, friendly employees;
•    having knowledgeable employees;
•    having employees who can resolve an issue without having to transfer a call to another agent or a supervisor;
•    keeping wait time before being served to a reasonable limit;
•    having issues resolved in a reasonable amount of time;
•    having the option for self-service;
•    having multichannel options;
•    having customer service available at convenient times;
•    having access to eco-friendly options;
•    keeping the time it takes to read and understand information provided to a minimum; and
•    having agents who know customers’ histories based on information they already had provided.

Though customer service is still lacking in many areas, the news for telcos and ISPs is not bleak, according to Wollan. Customer dissatisfaction didn’t continue to rise this year, as it had done for the six years prior, he says.

The big reason for that has been the rising investment in new customer relationship management solutions and technologies by telcos and ISPs. “The industry is now making investments in technologies to improve customer service, and that investment is being noticed by consumers,” Wollan says. “The technology investments seem to be getting through to customers.”

Wollan also indicates that telcos and ISPs are in a better position than many other industries to take charge of social and mobile media. “The industry is at the center of the digital, social, and mobile revolution, and this is a chance for the telcos and ISPs to step out farther,” he says. “It’s a real opportunity for them to change the game.”

News Editor Leonard Klie can be reached at lklie@infotoday.com.

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