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Communication service providers (CSP’s) operate in an extremely complex and challenging market. Competition is fierce, differentiation is tricky, customer churn rates are high, average revenue per customer is falling and customer satisfaction seems to be diminishing despite our CSP’s best efforts to implement strategies to improve on these metrics.
In a study conducted by the IBM Institute for Business Value it was found that customers of service providers belong to 1 of 3 categories, these being Advocates, Apathetics or Antagonists. Advocates were characterised by being loyal clients who refer business and resist competitor’s offers. Apathetic customers were those who showed no strong feelings either way towards the CSP. While Antagonists were seen to hold negative views about the organisation and could often pass these views onto their social networks.
The study which took into account the opinions of over 12,000 customers across 24 countries, found that Australian Service providers were rated 4th worst, with 70% of respondents deemed to be Antagonists and only 9% being considered Advocates. These alarming findings should be carefully reviewed by Australian CSP’s as Antagonists can adversely effect an organisation through both damaging the brand equity as well as the financial performance of that organisation. Antagonists now have the ability to have a greater influence on brand equity than ever before, largely due to the growing use of social media; negative messages are no longer confined to small family or friendship groups, they are now being distributed instantaneously to 100’s of connections who also have the opportunity to pass on the Antagonists sentiments. From a financial perspective, Antagonists buy fewer services, have higher levels of churn and are less valuable when compared to Advocates. These factors make it extremely important for all CSP’sto ensure they are increasing advocacy levels and lowering Antagonist levels, or at the very least converting their Antagonists to Apathetics.
So, with such minimal success coming from large investments into customer loyalty and satisfaction programs what should CSP’s be doing differently?
• Apply a social behaviour “outside in” perspective: use social media to listen and understand digital dialogue, proactively respond to negative chatter, become part of a two-way dialogue with your customer and use social network focused analytics to find influencers.
• Profile and target advocacy segments: Segment your customers as Advocates, Apathetics or Antagonists, collaborate with Advocates to develop new products or services, target your advocacy segments and devise strategies to neutralize Antagonists negative impacts.
• Build multilevel capabilities: Develop KPI’s that correctly reflect advocacy levels, design processes based on how customers like to interact with their CSP’s, invest in non-traditional analytics capabilities to generate customer intelligence and mine digital channels.
Australian advocacy levels are particularly troubling by world standards and this should be of great concern for our service providers. Australian CSP’s need to concentrate their efforts on improving advocacy levels if they are to succeed in an increasingly saturated and competitive market. If service providers don’t look to implement new strategies that address advocacy levels they will undoubtedly continue to see high customer churn rates, low revenue per customer, reductions in brand equity, higher customer acquisition costs and ultimately poor bottom line performance. Opportunity exists for a first mover to use some of the strategies above to drive high levels of advocacy and in so doing take market share.
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