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How mobile operators can make a difference to customer experience

Stephen Sale Research Director, Consumer Services

"In many cases, a focus on customer experience is also helping to reduce costs ."

Many telecoms operators are placing customer experience at the heart of their strategies, and are seeking to differentiate themselves from competitors by better meeting the needs of their customer base. In many cases, a focus on customer experience is also helping to reduce costs through, for example, customer-driven capex programmes. Customer experience itself has many aspects including network performance, interactions with customer services and perceptions around value-for-money.

This article draws on primary research from across 21 countries to highlight how different factors are perceived by customers. Understanding how and where these factors apply can help operators to better achieve their aims to be customer-centric, and can help to set expectations for investment decisions.

Many factors contribute to mobile operator NPS

The standard industry metric for measuring customer satisfaction is the Net Promoter Score (NPS). It is widely used by telecoms operators (and players in other sectors) to assess their performance against their peers on an ongoing basis. Customers are asked how willing they are to promote their service provider on a scale from 0 to 10 (where 0 is not at all willing, and 10 is very willing). The percentage of detractors (scoring 0 to 6) is subtracted from the percentage of promoters (scoring 9 or 10) to give an NPS between –100 and +100. The scores for telecoms operators vary widely. The highest score among the major mobile operators included in our 2017 survey was +29 for Free (France).

Some aspects of mobile services have a greater impact on individuals’ willingness to promote (and, therefore, NPS) than others. We performed statistical regressions to assess the effect that a one-point improvement in satisfaction rating for different service elements has on the willingness to recommend, with all other things being equal. The results show the main factors that make a difference to NPS in various countries. Many factors interrelate, but the contributions show which factors are more important in different countries. For example, in Spain, a one-point improvement in one customer’s satisfaction with network coverage (on a scale of 1 to 5) correlates with an average increase in willingness to recommend of nearly 0.6. This could potentially lead to a large increase in NPS (by as much as 10 to 15 points) if the benefits were fully realised across the customer base.

Figure 1: Results of statistical regressions on satisfaction scores against respondents’ willingness to promote their service provider, by country, for each of the five regions: Europe, the USA, Asia–Pacific (APAC), the Middle East and North Africa (MENA) and Sub-Saharan Africa (SSA) [Source: Analysys Mason]

Figure 1: Results of statistical regressions on satisfaction scores

Network coverage is the single most decisive factor globally, but there are plenty of local variations

The results highlight many differences between countries and regions. The specific roles played by the various service elements are as follows.

  • Network coverage. The single largest determinant of customer satisfaction across the whole sample was network coverage. This was most notable in the less-developed markets, particularly in the emerging Asia–Pacific countries. Improving coverage satisfaction leads to a greater improvement in NPS than other factors. Indosat in Indonesia is an example of where an operator’s NPS was pulled down by customers’ poor perception of its network.
  • Data speed. In Europe and the USA, satisfaction with data speed and network coverage showed collinearity: they accounted for the same contribution to willingness to promote. In other words, in these countries, customers seem to have a more unified perception of network performance. In less-developed markets, there was more divergence. Some smaller operators with focused build-outs in urban areas were often able to score well on satisfaction due to their ability to meet the needs of their customers with focused investments in capacity. An example of this is 9mobile, which has the highest NPS in Nigeria.
  • Customer services. Satisfaction with customer services shows more divergence than for most other factors, with more polarised results; a relatively high proportion of respondents stated that they were “very dissatisfied” with customer services. The level of satisfaction with this element is often a very strong predictor of willingness to promote (and also propensity to churn), particularly in the developed markets of Europe and the USA. We have been able to identify several operators that appear to have challenges with their customer service operations. We have also identified (generally positive) effects from the digitalisation of customer service functions.
  • Pricing. We found that pricing was a less decisive factor in overall NPS than the factors already discussed, despite levels of satisfaction with pricing generally being low. This suggests that there are opportunities for operators to monetise improved network performance, for example, in many markets. There are, however, important exceptions. Price is still the main determinant of satisfaction in a few markets (Poland and Saudi Arabia). It also accounts for the NPS leadership of a few operators, where a strong performance on price overcomes weaknesses in other areas. Examples include Free (France), Telkom (South Africa) and Yoigo (Spain).
  • Allowances. Satisfaction levels for data allowances sometimes showed collinearity with price satisfaction but were generally weaker predictors of customers’ willingness to promote. Higher volume allowances are generally available to customers, though there are exceptions (where operators have tiered their plans in less customer-friendly ways). Voice and SMS allowances rarely made any difference to NPS, only featuring as a factor in a few markets.

The relative importance of the drivers of customer satisfaction in different countries can act as a guide to operators’ strategies to gain advantage. The analysis of our consumer survey data points towards the potential trade-offs in investment for price competitiveness, improved network performance and addressing shortcomings in customer service, among other things. The results show what operators can do to really make a difference to their customers.

Further details on the drivers of customer experience can be found in our series of reports on mobile customer satisfaction and churn, available for Europe and the USA, MENA, emerging APAC and SSA. The fieldwork for the next round of primary research is being undertaken in July 2018.

If you have any questions, please contact Stephen Sale, Research Director, at Stephen.Sale@analysysmason.com.