July 31, 2013

A new report from Ericsson ConsumerLab shows that network performance is key to ensuring subscriber loyalty and low churn.

Online interviews were conducted with 1,000 smartphone users across the world. The findings show that users sometimes express concerns about the experience they get from current network performance. The report concludes that improving performance will increase user satisfaction, improve operator revenue over the subscriber lifetime and ensure a competitive advantage.

Although the report focuses on mobile network operators we know that many smartphone users frequently use their devices on WiFi networks both at home and on the move. WiFi is an important way to access internet for both business users and private users at offices, airports and shopping malls. Even at home, many users rely on high accessibility, good bandwidth and top quality both for business purposes and for triple play services.

This makes it increasingly important for IP network operators, as well as for Internet service providers, to secure end customer performance. However as the report states, "It is not enough for operators simply to improve network performance in the hope that customers will notice. Communication is essential for improving customer perceptions. Users need to be aware that things have changed for there to be an impact on satisfaction levels, and for this to improve their loyalty to the operator".

To improve customer loyalty, operators need to have the means to accurately show the performance of their network from an end-user perspective and to clearly be able to identify if the reason for flaws is within their responsibility or if the problem resides with other parts in the delivery chain. Operators having insight into the performance of their network and also communicating this to their customers will get the most loyal customers which are less likely to switch to a competing service provider, leading to higher revenue over the user's lifetime.

About the report: Ericsson ConsumerLab conducted online interviews with 1,000 smartphone users, aged 18 to 64, in each of the following 12 markets: Brazil, Chile, China, Indonesia, Japan, Mexico, Russia, South Korea, Sweden, Turkey, the UK and the US.

Loyalty was measured using the Net Promoter Score (NPS) metric.

All ConsumerLab reports can be found at www.ericsson.com/consumerlab

Link to report: www.ericsson.com/res/docs/2013/consumerlab/keeping-smartphone-users-loyal.pdf