Report Analyses Telcos' Retention Challenges

Marketers in the $1 trillion (£596 billion) global communications industry are facing unprecedented challenges in building loyalty and retaining customers, as cut-throat competition and new service models undercut pricing, prey on lucrative customers and disrupt established markets. 
That’s the conclusion of a study just released by the CMO (Chief Marketing Officer) Council and the Customer Experience Board (CEB). The study notes that free or low-cost interactive digital media channels, social networks, mobile messaging devices, online communities and other forms of content-rich engagement are permanently altering the communications marketplace, and redefining customer experience.
The global audit of over 140 industry marketers in the telco, wireless, cable, satellite, broadcast and Internet Service Provider sectors highlights where and how technology convergence and customer empowerment are bringing rapid and profound change to a once glacial and monopolistic landscape.
Entitled ‘Service Invention to Increase Retention,’ the 80-page CEB report finds that incumbent providers believe they must improve processes and systems for customer retention and monetization, enhance service and support, and increase delivery of innovative products, if they are to keep pace with changes in today’s communication market.
The huge popularity of social networking and user-generated content is viewed as the most significant digital lifestyle shift impacting the market, according to 47% of survey respondents. In addition, expectations for always-on access to content on every device, and more personalized on-demand services and experiences, are forcing service providers to re-think their operational structures, product portfolios, customer handling systems, and strategic partnerships and investments.
“Marketers are being challenged to create brand preference and differentiation in a growing and already crowded market,” says Donovan Neale-May, Executive Director of the CMO Council. “These incumbent communications providers are struggling to adapt to increased innovation, growing price pressures, and heightened competition from new and adjacent market entrants.”
Over 84% of respondents to the CEB audit reported that the cost of acquiring and sustaining customer relationships is increasing for their companies, while 63% said they are seeing higher rates of customer churn and attrition. The biggest contributors to customer defection are competitive offerings, pricing or fee structures, and inadequate customer service. This is further accenting the need for more adept customer data integration and analytics, and better listening, feedback and engagement systems, as well as closer collaboration between IT and marketing groups.
By its own admission, the communications industry is falling down in some key areas of customer experience, including listening and responding to core concerns. The biggest sources of customer pain are said to be unmet needs and expectations (59 %), followed by product/service usability and complexity (43%), billing errors (40%), and quality or relevance of service or product offerings (32%).
The report is available for download here.