Telco data issues lead to customer loyalty gap - research

Industry needs to improve use of new channels, says report

Telcos and other communication service providers are facing a growing customer loyalty gap, according to global research from IBM.

With better informed, connected and demanding consumers the comms providers are seeing the growth of a less loyal customer base as they take advantage of new channels for information. There is also a pervasive "love my phone, hate the service" attitude among many customers, says IBM.

For its "Global Telecommunications Consumer Survey", IBM polled over 13,000 consumers in 24 countries to assess general attitudes, spending priorities, grievances, information sources for products and services, and overall purchasing values.

"There is a gap in the marketplace in how consumers perceive their provider versus how they perceive and value, for instance, their actual device," said Bob Fox, telecommunications industry leader at IBM Global Business Services.

To gain competitive advantage providers must deepen their consumer insights, encourage interactions and create an emotional connection to their customers like in other industries, says Fox.

IBM found that while consumers' perception on network services is relatively poor, it said most consumers do not engage with their provider on these issues. Globally, 54 percent do not complain to their provider when being disconnected from the network during a voice call or internet session. In the US 71 percent of unhappy customers do not complain.

Most said they didn't complain because it was too much hassle to speak to someone in a call centre or that they didn't think it would improve the service as a result.

IBM said providers could help address service and other issues with the greater use of social media channels.

As an example of a disconnect between what consumer moans about and how a supplier reacts, one only has to look at Vodafone and how it reacted to cuts in roaming charges - a major consumer gripe.

Vodafone's warning that caps on roaming charges would cost jobs has provoked ire in European Union institutions. Vodafone CEO Vittorio Colao said earlier this week that unless the European Commission stops imposing price cuts, mobile companies will slash investment in networks.

"Does Europe need employment or does Europe need rate cuts? We should stop having this continuous intervention on prices and let the industry reinvest the money," he said. But yesterday, Digital Agenda Commissioner Neelie Kroes said she would not be threatened about pushing for roaming cuts.

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