A new global survey shows that customer retention and loyalty programs are growing increasingly important.
Conducted by Informa Telecoms and Media and commissioned by Amdocs, the survey says two-thirds of operators believe customers are less loyal today than they were two years ago. Seven in 10 service providers cite customer retention and loyalty as the critical factor for driving growth, with a strategic marketing prioritization shift from customer acquisition and market share to long-term customer engagement.
Due to market saturation and increasing competition, 82 percent of service providers said customer loyalty programs would be "very important" or "important" over the next five years to their company's strategy.
"Customers today have many competitive alternatives and service providers will need to rely heavily on loyalty strategies to combat competitors' aggressive offers to attract new subscribers in saturated markets," noted Julio Puschel, senior analyst and head of operator strategy for Informa Telecoms and Media. "Customer retention and loyalty, far from being a cost center, will become a new center of growth, provided that operators understand what their customers really want and devise their offers accordingly. Importantly, customer retention and loyalty programs need to be initiated early in the customer lifecycle and be present during the entire relationship between operators and clients, as opposed to relying on belated efforts to prevent churn."
The survey also showed:
- Sixty-five percent of service providers only initiate a retention program when the customer has started the process of leaving.
- Ninety percent measure customer loyalty by churn rates.
- Service providers overwhelmingly consider service quality, network coverage, network capacity and customer care as the key drivers behind customer loyalty; yet a previous consumer study shows personalized and tailored services, proactive care and rewards as most important to keep them from switching.
- Different regions have different churn trends. Most are seeing linear growth in churn, with higher prepaid penetration regions facing the biggest customer loyalty challenge; yet North America, despite a lot of competition, is bucking the trend thanks to better loyalty programs and a more in-depth knowledge of the customer.
