Major challenges face telecoms brands

05 September 2012

NEW YORK: Telecoms brands around the world are increasingly struggling to build customer loyalty in the face of rapid technological change and rising competition, a study has argued.

Ricoh, the print services firm, and the CMO Council, the trade body, polled 1,660 mobile subscribers worldwide, of which 29% predicted they would remain loyal to their existing provider come "rain or shine".

Better packages or upgrades could persuade 24% of the panel to switch. A further 13% of contributors simply wanted the most advanced handsets on the market.

At present, some 48% of participants had been with their current provider for between one and five years. Only 18% had changed provider in the last 12 months, and 11% actively thought about doing so in this period.

Nearly half of respondents that did blamed high prices, easily the top score here. Among their peers who had considered it, ads from rival firms were the main reason on 16%, and 11% cited a lack of rewards for staying loyal.

Moreover, only 21% of interviewees had bought additional products or services from their current provider after receiving marketing communications, suggesting greater efforts are required in this area.

The most popular mobile activities at present include making calls on 84%, text messaging on 73%, taking photos on 48%, accessing the web on 39% and checking emails on 31%.

Overall, 27% of the individuals surveyed believed they were "completely reliant" on these services, and 26% stated it would be a "tremendous sacrifice" to do without them.

"The question is not whether consumers will use wireless services but rather which carrier they will choose, what new value-added services will be important, and how long these services will retain their value to consumers," said George Promis, a vice president at Ricoh Production Print Solutions.

A separate poll of over 150 marketing executives, conducted for the same Ricoh/CMO Council report, found that 47% were seeking to keep up with customer expectations for innovation, while 35% grappled with demand for highly advanced services at low cost.

Meanwhile, 31% of firms agreed increased competition required greater adspend. Another 57% reported their own in-house marketing resources had been reduced.

More broadly, 59% of the sample agreed that real-time data could help them enhance understanding of customer retention, profitability and value, making this a vital area of activity going forward.

Data sourced from CMO Council; additional content by Warc staff