How to Improve Customer Retention in the Telecom Industry

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Does the thought of life without a phone set your spine tingling with fear? If so, you’re not alone. It just goes to show how integral telecom companies have become in our hyper-connected modern world. Yet, despite this increasing necessity, keeping customers faithful hasn’t been easy. Accenture reports that 77% of consumers are no longer as loyal to brands as they were even three years ago. Much like everyone else, the telecom industry must work harder than ever at customer retention.

Traditional telecom business models have eroded

Even a couple of decades back, most telco revenue was generated from voice traffic. Companies made their money from premiums on long-distance calls. An explosion in technology has given rise to a fundamentally different landscape with myriad new factors and considerations. From a simple text to hailing a cab right from your phone, the way things work in telecoms has changed forever.

Digital disruptors have taken significant market share.

• In Singapore, MyRepublic launched in 2012 and quickly took 7 percent of fixed-broadband market share.
• In France, Free Mobile captured a 19 percent telecom market share within four years of launching in 2012 thanks to strong digital customer engagement and digital-only distribution.
• In the United Kingdom, a model using crowdsourcing for customer service helped giffgaff become a popular telecom brand.

With the Internet of Things and 5G on the horizon connecting us ever-more closely, the possibilities for the future are seemingly endless.

What telecom customers want now

Customers want a good customer experience – 53 percent say good customer experiences play an important role in their decision making when it comes to telcos.

But, telcos have failed to deliver on this front, placing last among a number of industries for meeting customer needs. Unless they can start delivering against customer expectations they risk not only short-term loss of revenue, but alienating customers even further.

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Failure to provide high-quality customer experience means only one thing – churn. A recent study revealed that 39% of Americans who canceled a contract with a company in the past 24 months said poor customer service was the main reason. More than half (52%) canceled a phone, internet, TV or cable contract – 64% of them canceled after an ongoing negative experience, while only 17% canceled after a one-time crisis. It’s clear that customers are willing to forgive lapses, but will not tolerate a sustained below par experience.

As the world has changed around them, customers have developed certain expectations of telco brands and how they provide for their customers. They want them to:

1. Be digital-friendly. Fifty-four percent would consider alternative providers if the online customer journey was difficult or taxing.
2. Be service & experience oriented. Seventy-five percent would be more likely to buy a product if video or live chat were available to resolve doubts.
3. Be engaging and conversational. Seventy-seven percent would like more human interaction online.
4. Offer seamless and quick sales assistance. Forty-five percent think real-time assistance is important when choosing a network provider online.

An ideal end to end digital experience might look something like the below:

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7 practical tips to improve customer retention in telecoms

So here are some practical ways to promote successful customer retention in the telecoms industry.

1. Create a frictionless experience

The failure of telcos to provide a smooth experience can lead to customers cancelling contracts. Customers feel telcos take up too much of their time, (37% waited too long to have their issue resolved), and leave them having to unnecessarily repeat information (51% had to call more than once).

In the US, Comcast has looked to address this with their omnichannel CX approach. Customers can interact with the company via their preferred channel, whilst the data set and action flow remains consistent. The company strives to make transitioning from one channel to another as painless as possible, ensuring customers are never required to start from the beginning.

2. Innovate through strategy and technology

According to Ernst & Young, failure to adopt new routes to innovation was listed as one of the top ten biggest risks in telecommunications a few years back. Innovating through finding new and interesting ways of transforming customer experience is needed to keep on top of change:

• Demonstrate thought leadership. US-based telecom AT&T joined the Global Telco Security Alliance in an effort to improve security solutions for enterprise telecommunications. AT&T is showing thought leadership in enterprise wireless communication security that could help the company grow business.

• Embrace innovative technology. One major Hong Kong telco historically needed three hours to pinpoint the location of network faults. After installing sophisticated monitoring technology, they decreased that time to just 30 minutes. The operator reduced complaints from its high-revenue customers by 47% for 3G networks and 34% for 4G, while churn rate dropped from double digits to only 1.5% over just a few years.

• Use loyalty programs. Mobile provider O2 in the UK offers experiential rewards, such as priority music tickets and priority entertainment access, allowing the customers to choose which to take up based on their personal preferences.

3. Listen to customers and act on feedback

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Customer churn doesn’t usually strike out of the blue. More likely, a desire to leave has built up over time as customers grow increasingly disgruntled with their experience. Listening to what customers are unhappy about and then acting on it can help tackle these issues and encourage customers to stick around.

It’s particularly useful to take the time to gather feedback from customers who no longer use your service. Turn the insights provided by this into tangible action and you may well be able to stop the same thing happening in future. Comcast, for example, surveys customers who disconnect their service to identify the root cause of their complaints and address them. You can easily do that with a short form that pops up after an online cancellation or by training agents to ask specific questions over cancellation calls.

4. Ensure proper training and materials

When customers leave a telco, poor customer service and lack of well-trained reps is often cited. In fact, telecoms are infamous for the low ratings they receive for their customer service departments and reps. One study indicated that, of the customers that churned due to poor service, 36% thought the representatives weren’t “knowledgeable enough” and 37% thought they were “rude or had a negative approach”.

We can all think of a time when we’ve had a frustrating customer service call that leaves an unshakable negative feeling towards the brand. Yet, if a customer service rep hasn’t received the right training, or is equipped with a poor script, they can’t be expected to be experts at fielding customer calls.

5. Implement relevant loyalty programs

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The CMO Council found that 12 percent of customers changed their provider purely because they saw no prospect of their loyalty being acknowledged or rewarded.

The good news is this is easily avoidable. Loyalty programs are a clear chance to offer your customers something to keep them engaged. The use of customer insight data helps you tailor your offerings to reflect their needs. For example, when contracts are up for renewal, the particular usage patterns could determine the nature of the new contract. If customers use data, make long distance calls, or are always sending SMS, reflect that moving forward. Personalization could make the difference between a customer staying or leaving.

6. Be proactive

Even though 61% of the telcos involved in one study attempted to persuade their customers to stay after cancelling their contracts – by way of an apology or discount offer – this proved largely insufficient. Yet, among those who churned after having a negative service experience, 40% would have changed their mind if they had been offered a better service plan, and 33% would have stayed if they had believed that the service would improve in the future.

The data to understand the danger signs of churn is there to be acted upon. It could be something as simple as tapping into contract renewal dates and getting in touch with customers around this date to upsell personalized packages. The company Telco has gone one step further and set up a system to track and foresee customer problems. This allows customers to solve questions and difficulties on their own. It was a move that brought about a 90% reduction in support calls.

7. Provide more human interactions

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Following digital trends is a must, but that doesn’t mean the human factor should be left out. Given that 77% of customers would like more personal interactions with telcos, there is always space for the human touch.

For example, T-Mobile has sacrificed IVR and other automated customer service technologies, instead focusing on the “human touch” approach. A Team of Experts – small, local groups of customer service agents – provide individualized support. Dedicated teams of customer care reps offer fast, efficient assistance on a broad range of topics, from basic to complex. Team members are all on top of customer issues, picking up the conversation thread seamlessly if follow-ups are required. Given that T-Mobile was awarded J.D. Power’s Highest in Customer Service among Full-Service Wireless Providers twice in a row, it seems like it is on to a good thing.

The battle for trust

With our inherent need to connect with others and desire to consume content, telcos will always be well positioned to get business. Getting consumers’ outright trust and admiration is a whole other matter. It’s certainly a tricky prospect, but by focusing on measures to enhance the customer experience, telcos can start positioning themselves as so much more than just a troublesome necessity – instead becoming trusted confidants that customers want to build long-term relationships with.

Benedict Clark

Content Editor

Benedict Clark is a psychologist, writer, and former digital marketer. He writes about the interplay between customer experience and psychology for Acquire.