Customer loyalty dependent on tariff, service quality, says report
Following analyses and comparisons across a sample of markets in Africa, Europe and Latin America, Tecnotree, an Information and Communication Technology solutions provider, has shared reasons for customer loyalty to its service providers. According to the recent survey conducted by ‘On Device Research’ on the perception of customers loyalty to mobile phone networks, and why some customers switch operators, across countries, it was noted that churn is primarily driven by the incentive of a better device, with better tariffs playing a secondary role.
The research, which was conducted in February 2013, involved 2,700 respondents across Germany, Spain, UK, Argentina, Brazil, Mexico, Kenya, Nigeria and South Africa. The study, titled ‘Subscriber Perspective to Customer loyalty’, further revealed some of the most loyal nations, as well as those nations most likely to switch networks. Tecnotree’s 2013 study showed that among the majority of customers in various nations who are loyal to their service providers, Kenya, Argentina and Germany came first 66 per cent, 57 per cent and 53 per cent respectively. Equally, the mobile subscribers surveyed have remained with their existing communications service provider (CSP) for at least two years.
The report revealed, also, that CSPs drive loyalty through device upgrades and better tariffs, supplemented by a bundled service offering, and a broader all of the above tactic.
Loyalty, churn, and incentives
Probing further, the research placed the least loyal mobile users of the countries surveyed, with 44 per cent of mobile users in Nigeria, 42 per cent in the UK and 30 per cent in Brazil as having churned in the last 12 months. The report further noted that churn is primarily driven by the incentive of a better device, with better tariffs playing a secondary role. The result, however, indicated that 4G will provide a major incentive to churn, with an average of 59 per cent of respondents across all nine markets stating that a service provider offering 4G would be a major incentive to switch. Commenting on the report, Tecnotree's Chief Technology Officer, Timo Ahomäki, said that device upgrades and better tariffs are as much about loyalty for service providers as they are for driving churn. According to him, right now, network coverage is having minimal impact on loyalty and churn, but as service providers roll out 4G, the promise of faster download speeds will become a very appealing incentive to churn.
Amaka Eze, This Day (Nigeria)