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Network performance to determine smartphone customer loyalty

Regina Pazvakavambwa
By Regina Pazvakavambwa, ITWeb portals journalist.
Johannesburg, 30 Aug 2016
Loyalty among smartphone users is much more complex and fragmented than most businesses realise, says an Ericsson report.
Loyalty among smartphone users is much more complex and fragmented than most businesses realise, says an Ericsson report.

As smartphone users' behaviour changes, traditional measurements are no longer enough to determine whether telecoms customers prefer their operator.

This is according to a new global report from Ericsson ConsumerLab: Experience shapes mobile customer loyalty, which surveyed 1 000 smartphone users in 14 markets online (except India, in which 2 000 users participated.

Loyalty is a notoriously difficult metric to measure within the telecommunications industry, yet it is essential in understanding consumers' reasons for choosing - or staying with - a particular operator, says the report.

The report states Net Promoter Scores (NPS) are no longer enough to gauge smartphone user loyalty.

Many businesses rely on the NPS, a simple metric to gauge consumer satisfaction and loyalty, based on whether or not consumers would recommend them, says Ericsson.

It says although NPS may be helpful, it tells only a small part of the story.

When consumers consider using a brand's services or products, they often compare the alternatives available, says the report. They may highly recommend one operator, but be equally as positive about many others as well, it adds.

This illustrates the need to understand consumer loyalty in the full competitive context, says Ericsson.

Challenges

The report also says while cellular networks have improved over time, smartphone users are still facing issues as frequently as they did in 2013. Among smartphone users globally, two in five claim they face more than 11 issues at least weekly.

Smartphone users who face a high number of issues are approximately twice as likely to contemplate switching operators compared with those who don't face issues, it adds.

Web page loading times, buffering issues on video streaming apps and social media picture upload delays are all factors that consumers consider when judging their experience, notes the report.

While mobile broadband coverage has improved, the ever-evolving nature of apps and new video streaming behaviour is placing different demands on a network's expected performance, says Ericsson.

Millennials expect operators to communicate how social and video streaming apps perform, rather than just talk about network coverage, it says.

Past Ericsson ConsumerLab studies also indicate that network performance and value for money are correlated. This suggests that improving network quality also increases the perceived value for money - without actually lowering tariffs, notes Ericsson.

"As new apps emerge and video usage behaviour evolves, network performance will matter more than ever and will determine how loyal smartphone users will be to their operators," says Jasmeet Singh Sethi, Senior Advisor with Ericsson ConsumerLab.

However, loyalty among smartphone users is much more complex and fragmented than most businesses realise, says the report.

Ericsson ConsumerLab discovered that despite all the issues faced, most smartphone users still stay with their operator. This is mainly due to cost, time, difficulty or inconvenience involved in switching, explains Ericsson.

Also, in many cases, consumers who say they would recommend their operator, do so not because they prefer the operator, but because they cannot identify a better alternative, the report states.

Smartphone users are not generic and, therefore, it is critical that operators recognise this and respond to different customer needs and behaviours, it adds.

As new apps continue to emerge and usage behaviour evolves, network performance will matter more than ever and will decide how loyal smartphone users will be towards their operators in the future, concludes the report.

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