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Telco differentiation comes down to customer experience

Telco differentiation comes down to customer experience

KPMG study observes telco mobile market best practises for differentiating customer experience to keep them long-term

The growing importance of customer experience is one way for telcos to win and retain mobile customers, according to a new study by KPMG.

The study into the telecommunications mobile market found that providers who differentiate based on a customer experience focus, were likely to keep them in the long-term.

The studyIn Search of a Better Customer Experience involved sampling, comparing and testing firsthand the customer experiences across 106 providers of prepaid mobile services in 25 countries and multiple channels.

KPMG Australia lead partner, technology, media and telecommunications, Chris McLaren, particularly pointed out that Mobile Virtual Network Operators (MVNOs) were especially smart about creating a differentiated customer experience for prepaid customers.

“The popularity of prepaid and the increasing competitiveness within this segment make it ideal to study in terms of how telcos are applying best practices to differentiate the customer experience,” McLaren said.

In the retail customer experience, unsurprisingly, customers do not like to wait to be served. The average wait time is five minutes with the longest wait times (up to 30 minutes) seen in the United Arab Emirates and New Zealand. Extremely low wait times were recorded in Canada, Indonesia and Nigeria.

About 60 percent of carriers observed used queuing systems to set expectations about wait times. Best practices were seen where staff at a retail outlet used a concierge service using tablet devices to manage customers.

The study highlighted the fact that even with the explosion of smartphones, many service providers were not taking full advantage of selling products and services online.

MVNOs, however, lead the pack in high-quality online experiences in the sale of prepaid services largely because their business models are predominantly online-centric rather than focused on a strong retail footprint. Overall, only 45 percent of service providers sold prepaid services online, according to the study.

“MVNOs generally offered the superior online experience. Their processes were more straightforward with fewer screens and data entry fields and easier navigation,” McLaren said. “There is a significant opportunity for improvement for many carriers in the online channel.”

The growing complexity of usage plans may be presenting an additional advantage to MVNOs in the prepaid market because the study showed they tend to focus on simplicity in plans. In an effort to offer variety and flexibility, many service providers offer rigid plans that fall short of meeting customer needs, the report said.

The variety of methods – bank applications for smartphones, ATMs, PayPal, micro payment systems and social media - for topping up a prepaid plan was growing and gaining popularity, with most of the options seen across Europe and Africa. By contrast, the US and Australia, for example, with prepaid only occupying 23 percent of the total mobile communications market, did not offer these advanced options.

“While this study benchmarked the prepaid market, the lessons are just as valid for all the other services offered by telcos, global chair of KPMG UK media and telecommunications practice, Graeme Ross, said.

“In an increasingly competitive industry, it is important to provide a best-in-class customer experience to add and retain customers,” Ross said. “If a telco is not performing a task, its competitor will.”


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