While industry churn data offers a useful benchmark and indicator of customer retention, the numbers typically offer very little analysis into the reasons for customer defection; in particular what’s driving it and how can it be mitigated.
To better understand these important factors, and provide a unique glimpse into the attitude of today’s mobile consumer, the WDS Loyalty Audit 2013 has interviewed 1000 UK customers. The audit aims to help mobile industry professionals better understand the drivers for loyalty and segment their customers accordingly.
Uniquely, the WDS Loyalty Audit 2013 is the first to “stress-test” mobile customers’ loyalty. Many traditional Customer Satisfaction and Net Promoter Score techniques make assumptions based on a customer’s current (and historical) experience. What they don’t do is investigate the possible implications of a customer experience failure between the time of the audit and the time for contract renewal. A customer may say he’ll repurchase, but just how resistant is he to a competitive offer and will he forgive his mobile operator if there’s a network outage?
By doing this, the WDS Loyalty Audit delivers a more comprehensive distinction between Functional Loyalty (the customer’s likelihood to continue using a product or service) and what WDS defines as Ardent Loyalty, the type of loyalty that insulates a customer from competitive threats and increases forgiveness when service dips below expectations.
After all, a customer’s “decision” to continue using a product or service may, for example, be dictated by external factors (perhaps a switching penalty or poor network coverage from alternate providers), rather than an informed and conscious decision. In other cases, behavior that a mobile operator’s CRM (customer relationship management) system regards as loyalty is actually little more than inertia. This type of Functional Loyalty is easily broken, particularly when barriers to switching are removed or the customer is presented with an offer so attractive that it breaks the inertia that has anchored them to a service provider for so long. Mobile operators that will succeed in battling a wider, and more competitive, ecosystem will be those that understand the importance of “Ardent Loyalty”.
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