Capgemini breaks down why mobile carriers are failing customer expectations in terms of digital engagement, and how they can succeed
Consumers want an improved digital experience from their telecommunications operator, yet few report their needs are being met. On the loyalty front, digital engagement holds the key to their heart, and operators must digitally retool or risk being replaced.
A new report by the Digital Transformation Institute at Capgemini Consulting, “Unlocking customer satisfaction: why digital holds the key for telcos,” reveals two very interesting statistics that encapsulate how dissatisfied consumers have become with mobile network operators due to a lack of digital engagement:
1. More than half of the 48 operators cited in the survey registered a zero or negative net promoter score, meaning their customers would not recommend them to friends or colleagues.
2. Almost half (44%) of mobile users would switch to Google, Apple or Facebook if they introduced a mobile service.
Operators that get the digital customer experience right by rethinking and implementing digital engagement models with a balanced look at both the front-end digital shopping experience and back-end digital care experience stand to gain significant revenue and competitive advantage through improved customer satisfaction, loyalty and referrals.
Staying ahead with digital
Consumer preferences have evolved faster than operators have innovated, resulting in this high degree of dissatisfaction. Physical channels are falling out of favor, with only 8% of consumers surveyed now considering the existence of stores as a must have for mobile operators. There is broad desire for an improved digital experience, and yet only one-third of consumers believe their operator has used digital technologies – website, mobile apps and social media – to improve the customer experience.
Customers increasingly desire a digital-only experience with their mobile network provider. The bar has been set high for a digital, seamless experience by brands that interact with billions of consumers daily. Players such as Google, Apple and Facebook not only provide an engaging experience, but a personalized one too. As a result, almost half (44%) of mobile users would switch to one of these brands if they introduced a mobile service, and cited “better service quality” and “personalized experience” as the main reasons to switch. These findings are relevant to customer engagement both with consumers, but also with business-to-business customers, whose digital expectations are influenced by their consumer-selves.
The focus on providing a digital customer experience is paying off for some operators. The degree to which an operator is digitally enabled not only impacts its NPS, but also its revenue. High-NPS operators garnered an average revenue growth of 33% from 2012 to 2014, whereas the low-NPS operators suffered a revenue decline of 7% on average over the same period. Furthermore, there is a 40% difference in the average revenue growth rate between high-NPS telcos and low-NPS telcos.
Telco providers are at an inflection point: enhance digital capabilities to meet customer demands and drive increased revenue, or remain unfavorable among consumers and lose to newer, more digitally capable brands. Operators that choose to accelerate their digital transformation efforts must focus equally on the front-end marketing and digital shopping experience as well as the back-end customer service, as those are the fundamentals of a consumer journey that retain and attract customers.
Operators seeking to build competitive differentiation and increase favorability need to rethink and implement digital engagement models. By rethinking their approach to analytics and business intelligence, carriers can foster a more engaged, personalized relationship with customers, seamlessly connecting the front and back end. Analytics and data help drive smarter interactions, targeted customer offers and more proactive service interactions, ultimately improving an operator’s ability to digitally engage with customers.
We’ve observed vast changes to the telco industry over the past 10 years. The rise of internet companies, smartphones, mobile applications and “4G” have changed customer expectations drastically, not to mention the unique mindset and preferences of millennials and the retail experience the generation has come to know and expect. The game and playing field has changed. Yet this backdrop holds the potentials for vast innovation and transformation.
The benchmark for customer service has been set high by brands like Costco, USAA and Amazon.com. These firms have redefined service quality. Telcos should view these disruptive times as an opportunity to develop a strategy to transform their business to a higher standard – that starts with their digital core. In today’s world, it is nearly impossible to imagine an enhanced customer experience that is not centered on digital capabilities.
Michelle Mindala-Freeman is VP of strategy and solutions in the High-Tech, Entertainment and Communications Practice at Capgemini, a global leader in consulting, technology and outsourcing services. Sarah Pope is a principal in the Digital CIO Advisory practice Capgemini Consulting, the global strategy and transformation consulting arm of the Capgemini Group.
Editor’s Note: The RCR Wireless News Reality Check section is where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.
