Despite all the talk about quality, it’s still a churn driver

Telecoms is an industry obsessed with quality and, on the whole, we’re very good at it. But it’s not how well we think we’re running our networks that really matters – it’s our customers perception of the quality of their individual network experience that’s key.

Though it might sound obvious, this can be hard for technologists to understand. Because customer perceptions are made in the moment, are highly granular, and are often complex and emotive rather than rational. Added to that, technologists often fail to understand all the factors contributing to overall experience and ignore aspects they see as outside their remit.

Nevertheless, understanding the intersect between customer satisfaction, total network experience and network performance is vital to building customer trust and reducing churn.

The home network remains a customer experience blackspot

One of the most vital components of customer perceptions of quality is the experience they have at home – particularly with more people working from home, adopting bandwidth-heavy hobbies and utilising connected technologies within their home (so-called ‘smart home’ technologies).

Yet the home is usually a dark spot of experience for telcos, who only ‘see’ and manage experience to the router – with the result of this approach being dissatisfaction and increased churn.

According to new research from Airties, perceived network experience quality is a problem for many telcos – irrespective of where they’re operating. Their latest tranche of research focuses on the Japanese market, revealing that a quarter of Japanese customers (24%) are considering changing broadband provider because of quality issues. This compares to 28% of American households and 37% of British households.

Airties research dropped another truth bomb which we write about in our recent book (Telecoms Customer 2035).

Most customers don’t complain when they have a problem, they simply walk – with 51% of Japanese customers noticing a problem but only 18% contacting their service provider.

This so-called ‘silent churn’ is an ongoing problem that denies the telco the ability to address dissatisfaction. It also makes a lie of current telco thinking – that customer silence is a good thing, because talking to customers costs money.

Quality is a more important churn driver than price

Airties’ research reveals that 60% of churn risk in Japan is driven by quality issues, compared to 34% being about price. Drill down and multiple factors are contributing to the headline figure – 38% is due to frustrations with WiFi quality or internet connection, 13% because of missing features, and 9% due to poor customer support.

Telcos need to understand that customers don’t perceive home WiFi to be a separate or different domain to their mobile or broadband experience, but an integral component of their connected experience.

Customers blame their telco when their at-home experience is poor and ring them for support when it goes wrong. Telcos who persist in the belief that they don’t have to care about home WiFi because it’s not their responsibility condemn themselves to suffering high support costs, ongoing dissatisfaction and higher churn rates.

As John Lancaster-Lennox, Executive Vice President and General Manager Asia Pacific at Airties commented: ‘Japanese consumers want ISPs to take more responsibility for the quality of their home Wi-Fi experience, and to provide a smarter managed service with advanced features that guarantee performance across apps and devices’. But it’s not just Japanese customers that want this – ALL customers expect telcos to deliver a great at-home experience and to back this with proactive support, and world-class care. Failure to deliver against these expectations pushes customers to churn.

According to Airties, while 38% of Japanese respondents say their main reason for looking for a new supplier is due to poor quality in-home Wi-Fi and internet connections, this is also true for 31% of UK customers and 42% of US customers. Tellingly, more than half of Japanese customers who switched in the past year (54%), said they now pay the same or more than they previously paid – proving the switch was not about price.

The Bottom Line

Telcos will be blamed by customers for poor performance in the home network whether it’s their fault or not, and customers will expect their support. Shrugging off the problem isn’t an option. But there are many ways to turn risk into opportunity, build consumer trust and negate the risk of churn. For example:

1. Keep customers up-to-date. Ensure customers have up-to-date customer premises equipment, and that software and firmware updates, fixes and patches are installed. It’s a false economy to deny long-standing customers CPE upgrades and concentrate on supplying new equipment only to new customers – this is a significant churn driver and the cost of periodically upgrading equipment for free is significantly less than the cost of acquiring new customers.

2. See beyond the router. Network experience doesn’t stop at the router. Understanding the in-home experience of both fixed and mobile connections is essential to maintaining satisfaction and minimising churn. If you’re currently blind to this area of experience, partner with firms that can supply vital insight and ensure this is tied into your customer support organisation. Since customers are going to call anyway, be the ‘good guy’ who can readily assist – they will value this and may even be willing to pay more for it. Go one better and fix problems without the need for the customer to call.

3. Build value with managed smart home support. This includes supplying advanced features such as cybersecurity, equipment updates and refreshes, and smooth Wi-Fi optimisation. Households value all of these – especially as connectivity becomes more complex and safety fears rise. When combined with customer support that extends from the macro network to home Wi-Fi, this type of offering not only meets customer expectations but is vital for stabilising the customer base and building both trust and perceived value. Where telcos often go wrong, is seeing all of this as fragmented product offerings rather than building it into a coherent proposition. Don’t make that mistake.

Evidence Base

How do we know that customers will pay for a better in-home experience? Airties research backs up previous research from other sources. Its latest Japanese insights reveal that 44% of customers want a service that ensures reliable Wi-Fi coverage throughout the home and proactively ‘fixes’ any issues remotely. Forty-four per cent said they’d pay an extra ¥500–2,000 (around €3–11 or $3–13) per month for such a service – a significant potential uplift in ARPU that’s ripe and ready for taking.