The telecom industry has long faced the critical challenge of retaining customers with an average churn rate of 27% (in some segments, it rises to well above 50%). New research from CustomerGauge points to subpar customer service as a driving factor behind continued industry churn.
In fact, this study reports that 39% of consumers surveyed have left a telecom company due to poor customer service. Digging into the numbers a bit deeper reveals that much of this churn is preventable through a focus on providing exceptional customer service.
Key findings from this study include:
- 27% left because they felt like their time had been wasted
- 51% left because they had to call more than once to have an issue resolved
- 37% left because they felt that agents were rude, untrained, or incompetent
- 41% left because they felt that the self-service options were inferior
The wireless, cable, streaming, and internet providers that make up the lion’s share of the telecom industry are known for aggressive marketing campaigns touting price, performance, and features to entice consumers to make a switch. The industry at large spent tens of billions on advertising in 2021, and this increased 5% over 2020. Clearly, the marketing blitz to gain market share is showing no signs of slowing down.
However, when you consider that the cost of acquiring a new customer is 25 times as high as retaining one, keeping customers satisfied is an equally—if not more—important consideration. This is especially true in the telecom industry, which experiences the 2nd highest industry rate of customer churn due to poor customer service. In fact, most research suggests that as price, performance, and features remain relatively similar among providers, customer service is pointed to as the primary driver of customer loyalty.
In the telecom industry, a one-point increase in customer satisfaction leads to $2 in additional revenue per customer, so it’s well worth dedicating significant resources towards improving the customer journey. In our experience working with telecom providers, the core elements of a Customer Experience (CX) strategy need to focus on:
Multiple Communication Channels: Whether it is through voice, the web, chat, or email, customers want to interact through their preferred channels. An effective customer experience in today’s environment should offer options so they feel in control of their own journey. However, Execs In The Know reports that nearly half (47%) of customers feel forced into a certain communication channel. Brands that put the customer in control and provide a personalized experience, as we do for our clients here at Servicing Solutions, will experience a higher rate of customer retention.
Find The Right AI/Self-Service Tools For Your Customers: There are no shortages of AI and self-service tools to support the customer experience. However, one size certainly does not fit all. Before recommending or implementing any tool on behalf of our clients, our technology team analyzes the solutions that are most likely to be adopted by a particular customer base, and positively impact customer loyalty and our clients’ bottom line.
Human Touch: It is estimated that more than 70 percent of customer interactions will happen digitally in the next 2 years. However, it is still critical to proceed with caution. Despite the continued move towards digital self-service, 60% of customers will still bypass an IVR altogether, and 80% will avoid a company after a poor experience with AI tools.
Ready to Invest in Real Experience to decrease churn and provide an experience that retains customers? Let us know at sales@servicingsolutions.com.