By
Robert Machin
In a cut-throat market, what really persuades customers to move or stay with a service provider? Instinctively, we believe that the range of innovative products available to the customer, the technical quality of delivered service (QoS) and competitive pricing are the key factors in ensuring customer retention and extending the service contract. But we should challenge these assumptions - not least because they are often so costly to act upon.
Research indicates that as long as service quality (whether expressed as line speed or other technical quality issues) is broadly sufficient for a customer's needs, most consumers either don't know or don't care about technical performance, or, where they do care, they struggle to differentiate one provider from another. In addition, with one or two exceptions (the obvious example being the iPhone launch in most territories), customers believe they can get a similar range of products and services from many competing providers, and know from experience that, in a world where more and more services are digitally created, innovation is often quickly replicated at a lower price.
Finally, customers know that pricing tends inexorably downwards and discounted pricing from one provider tends to be quickly followed by others. As we have seen in other industries (the periodic newspaper price wars are a good example) only radical cuts (with serious impact on margins) are effective in influencing customer buying decisions.
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In the next generation telecoms world, though, providing a high quality customer experience is not straightforward and is actually becoming much more difficult.
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difference is the quality of service that the consumer actually perceives – sometimes called the customer experience - both in terms of how efficient the service provider is at the point of sale, and later, how responsive to problems and queries. This is shown to make a big difference in terms of how a customer experiences, for example, a supermarket, an insurance broker, or an
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We shouldn't be surprised by these conclusions, which merely reflect the fact that the telecoms market, for all its attempts to diversify into premium services and new revenue streams, tends to swing back to commodity selling (characterized by broadly similar equipment, services, and pricing).
If we accept them, then perhaps there are things to learn from other commodity markets, where what really seems to make a
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airline, all businesses which offer broadly the same range of services and roughly similar pricing.
In the next generation telecoms world, though, providing a high quality customer experience is not straightforward and is actually becoming much more difficult. Ever more complex bundles of services, the increasing involvement of delivery partners and third parties in the supply chain, the need to
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