Telco Customers Lack Loyalty

The telecommunications industry scored low marks for securing customer loyalty, a dangerous fact considering the upcoming Local Number Portability Act, according to a new report by Walker Information. Distracted by massive industry consolidation, new technology, and changing infrastructure, it seems telecommunications providers aren't getting a clear signal when it comes to customer complaints, according to the report. As telecommunications firms work harder to provide more options, they are enabling lower rates of customer loyalty and higher rates of customer churn, says Brad Linville, group vice president at Walker Information. "With all this consolidation going on, no carriers are enjoying a truly strong brand identity which can really impact customer loyalty and how they view a company" Linville says. "Another problem is that when these companies merge, they become more inwardly focused on restructuring and streamlining operations, and do not focus on providing better customer care." This further impacts loyalty because customers usually expect more from carriers once they merge, taking on a bigger-is-better philosophy in terms of customer care, Linville says. According to the Walker study, 75 percent of customers say they're satisfied with their current telecommunications providers and plan to continue their relationship. However, a mere 28 percent can be considered truly loyal, that is, those who want to continue their relationship and plan to continue purchasing service from their current provider. In many cases loyal customers are likely to increase their use of a product or service, and are more likely to recommend it to others. The study also found that only 54 percent of telecom customers said they would recommend their provider; 62 percent of customers say they would find it appealing to purchase all telecommunications services from a single provider; only 32 percent of telecommunications customers say they like the advertising produced by their providers; just more than half of customers indicate they perceived their providers as industry leaders. Linville says that for carriers to build a more loyal customer base they need to focus more on current customers and not simply acquiring new customers, establish a stronger brand identity, concentrate on providing top-notch customer service, and improve billing accuracy and clarity of charges. "Also, one area that most carriers do focus on, but must continue to do so, is quality of the actual phone service," he adds. "That has been a top driver of loyalty and will continue to be a driver as portability issues arise."
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