Editor’s note: Greg Mishkin is vice president of research and consulting at Market Strategies International, Atlanta. This is an edited version of a post that originally appeared here under the title, “To trust or not to trust: building loyalty in telecom.”
For nearly a decade I have watched the largest and smallest telecommunications companies attempt to gauge their customers’ experience and overall satisfaction. Measures like Net Promoter Score (NPS) have been all the rage for the past several years, where company leadership views likelihood to recommend as a proxy for brand health and happy customers. We also focus a lot on the quality and value of the services they provide. Reliability, accessibility, fewest dropped calls, network speed and cost give a robust picture of which parts of the service offering are working best and which are in need of attention. Taken together, these measures provide valuable information and critical key performance indicators (KPIs) that the C-suite uses to guide their decisions and maximize shareholder value.
But is it enough to have a strong product and satisfied customers? I argue that it is not. There’s a missing ingredient – one that is essential to any long-lasting relationship: trust.
When companies had your back
Back in the mid-1990s when I was a Sprint customer, they provided my local and long-distance landline phone service and, ultimately, my cellular phone service. I do not remember how good the quality of Sprint’s service was back then – it’s all a bit hazy in my aging memories. What I do remember is that Sprint told me I was one of their most valuable customers. I was part of a group they called “Sprint Gold.”
As a member of this esteemed group of customers, I received a personalized phone call from Sprint every six months to review my service and plan. Sometimes I learned that I was already on an optimal plan and there was no need for adjustment. Other times, I learned of new programs that improved my experience and saved me money. Sprint never tried to cross sell me or push for upgrades I didn’t need. No, they were looking out for me (or so I always believed) and weren’t contacting me just to get me to spend more.
I trusted them because I believed they were looking out for my best interests, even if it meant I would be paying them less money. This trust led to loyalty. I remained a loyal Sprint customer until I started working for Cingular Wireless in 2006, and I often think back to those semi-annual calls from Sprint and long for those days.
Connected – but not bound – by trust
Fast forward to today, and I am happy to say that my telecommunications services are light years better than they were in 1995. AT&T is my mobile provider and Comcast provides my high-speed Internet. Like so many, I am connected to these networks nearly 24 hours a day. In fact, I recently purchased a Microsoft Band that, when connected to my iPhone, ties me to telecommunications more than ever. Additionally, I have two laptops and an iPad that are all connected more often than not. I am very satisfied with the services my telecommunications providers offer and, from the vast research I have seen, most other customers are reasonably satisfied with their providers.
The missing ingredient today is trust. Sure they provide great services with unbelievable up-time percentages. And I would even go so far as to say that they do so at a very fair price. But the industry as a whole has been acting untrustworthy for a long time. Think about the some of these common customer complaints:
- complicated bills that hide inexplicable fees;
- complicated price plans;
- long contracts and high early termination fees;
- locked phones that can’t be easily transferred to other carriers’ networks;
- “cramming” third-party charges to bills;
- poor customer service; and
- mergers and acquisitions that leave customers confused about who is actually providing the services (see Merger Mania).
Beneath all of these complaints is distrust. For the most part, telecom companies have not shown that they care about their customers. Rather, their actions have shown that they care most about making money. Granted, this is starting to change with the elimination of – or reduced reliance on – contracts and clearer billing but some might say this is too little, too late.
Building trust in a changing market
As telecommunications services become increasingly commoditized, carriers are realizing that they need to expand into ancillary offerings and markets in order to maintain the growth rates that shareholders have come to expect. Telecom carriers are now offering services such as home automation/security (e.g., AT&T’s Digital Life), streaming content (e.g., Verizon’s partnership with RedBox Instant) and financial services (e.g., Softcard). In many cases, these businesses have failed to gain the expected market share due, at least in part, to the consumer simply not trusting telecom carriers to provide these services.
Without trust, carriers will struggle to find new areas of growth. Yet, many carriers today don’t think to research and measure customer trust. Telecommunications is a rapidly changing and increasingly competitive environment, and telecom researchers need to adapt to this change by adding critical trust measurements and KPIs to their research portfolio. As the old adage goes, “You cannot manage that which you cannot (or do not) measure.”