Customer Criteria for Choosing a Mobile Operator

As promised, we are continuing the more granular look from the the series of reports associated with the recently published Nokia 2016 Acquisition and Retention Study.   In the previous part of the series now being rolled out by Nokia (News - Alert), the focus was on Security as an influence on why customers decide to keep or switch their mobile service provider.  This week the deeper dive in on the report, Choosing a Mobile Operator. 

Let’s face it, we all know from our own personal experience that there are a variety of reasons why we select or switch our mobile communications service providers.  These range from bad network experiences to bad customer service experiences to the obvious one of better deals.  The Nokia revelations on these and other reasons why we stay or go are, to say the least, illuminating. 

As an inducement to read the entire report, which once again delves into differences in consumer attitudes based on country, market maturity and technology preferences among other criteria, the chart below is a case of a picture being worth a thousand words.

While there are discrepancies between Mature and Transition markets, they tend to be marginal. What does stand out is the rank order of the top reasons.  Interestingly, despite all of the emphasis on security and customer care as differentiators it is still price, network quality and coverage that dominate.  It is also not surprising to see “most of my friends/family use it” ranking so high.  As anyone, myself included, who is on a family plan knows, this historically and now is a major reason why switching is a consideration that is not as simple as it might seem.

Interestingly, what the study did find is that while 26 percent of respondents globally perceive switching to be a hassle, 22 percent of mobile subscribers think that switching operators to take advantage of deals being offered new customers make the hassle worth it.

Indeed, there is a lesson here that for some reason has escaped not just mobile operators but their kin in the fixed telecom and cable TV worlds.  If you can’t offer loyal customers the same kind of breaks that are offered new ones your best customers may pick up and leave.  As someone who has had service from the four major carriers in the U.S. over the years, I can say that lack of appreciation of my loyalty was the primary reason I jumped.  Things like number portability and most operators now retailing a wide variety of personal devices has only made this type of switch more enticing.

Finally, what was also of interest is what the influences are that are taken into consideration.  It turns out that while marketing campaigns online and in the media, along with in-store experiences have some clout, globally recommendations from other people (41 percent) trumped the next closest source of advice, in-store which tied with online at 25 percent.  It should be noted, as a word to those who control marketing budgets that “Don’t Remember” with 28 percent, actually was in second place overall, and traditional media (TV, radio and print) each were under 15 percent. 

In short, people rely on friends and family, and where the user experience comes in is not in regards to customer care but how the brand is experienced in person or online.  This is both a reflection of the times as well as food for thought including how to best integrate those in-store and online experiences.

Nokia concludes that while differentiation obviously remains the key in service provider selection, especially with the coming transition from 4G to 5G looming, as services become more and more alike based on quality and coverage, rethinking how to leverage pricing, bundling, security and customer care are places for operators to concentrate their efforts.  The overall brand experience, including taking loyalty more seriously, not technology, is how to create sustainable competitive advantage.

FYI.  Next up will be the report on the importance of value-added, bundled services and connected devices