A recent study of the telecommunications mobile market from KPMG International revealed key learnings about the growing importance of the end-to-end customer experience to win and retain mobile customers and suggests that those providers who differentiate here will keep them for the long term.
KPMG recently undertook a ‘mystery shopping’ study on the $US770 billion prepaid market utilizing it as a proxy to understand how carriers are performing in the area of customer experience. The study involved sampling, comparing and testing firsthand the customer experiences across 106 providers of prepaid mobile services in 25 countries and multiple channels across the value chain. The report, In Search of a Better Customer Experience, groups the findings into five customer experience areas and aims to identify the innovations, trends and better practices in customer experience across the retail, contact center and online channels, as well as the product offering and the top-up experience.
The report found that the end-to-end customer experience varies dramatically by country, service provider and channel.
“The popularity of prepaid and the increasing competitiveness within this segment make it ideal to study in terms of how telcos are applying best practices to differentiate the customer experience,” said Chris McLaren, Lead Partner, Technology, Media and Telecommunications with KPMG in Australia. “Mobile Virtual Network Operators (MVNOs) have been especially smart about creating a differentiated customer experience for prepaid customers. It is becoming universally acknowledged that creating a great customer experience can make the difference in winning and keeping loyal customers.”
The Retail Experience: Consistency in service a must
In the retail customer experience, unsurprisingly, customers do not like to wait to be served. The average wait time is 5 minutes with the longest wait times seen in the United Arab Emirates and New Zealand. Extremely low wait times were recorded in Canada, Indonesia and Nigeria.
Sixty percent of carriers observed used queuing systems to set expectations about wait times. Best practices were seen where staff at a retail outlet used a concierge service using tablet devices to manage customers.
“The leading practice globally was in one particular carrier’s New York City retail store where the concierge leveraged a tablet device to provide a differentiated customer experience to high value customers” said Ryan McCumber, global lead for the study and Associate Director with KPMG in Australia.
With prepaid mobile use having the highest penetration in many Asia Pacific countries, it is not surprising that China, Indonesia and Singapore rank first, second and third, respectively, in the retail customer experience; 100 percent of the stores surveyed in these countries had a concierge service.
The Online Customer Experience: MVNOs lead
Ironically, even with the explosion of smartphones, many service providers are not taking full advantage of selling products and services online. MVNOs, however, tend to lead the pack in high-quality online experiences in the sale of prepaid services largely because their business models are predominantly online-centric rather than focused on a strong retail footprint. Yet overall, only 45 percent of service providers sold prepaid services online, according to the study.
“MVNOs generally offered the superior online experience. Their processes were more straightforward with fewer screens and data entry fields and easier navigation,” noted McLaren. “There is a significant opportunity for improvement for many carriers in the online channel.”
The Contact Center Experience: Managing expectations with alternatives
The customer experience in contact centers is similar to the retail scene: a dislike for long wait times coupled with meandering through a seemingly endless series of voice prompts. The average time on hold after a customer finished the necessary interactive voice response (IVR) prompts was 2 minutes. However, the study cited instances of wait times approaching 30 minutes. Twenty-five percent of service providers surveyed had a call-back option in place and provided information on wait times.
Product Offerings: Complex array of choices
The growing complexity of usage plans may be presenting an additional advantage to MVNOs in the prepaid market because the study showed that MVNOs tend to focus on simplicity in plans. In an effort to offer variety and hence flexibility, many service providers offer rigid plans that fall short of meeting customer needs, the report said.
Start-up costs for new subscribers vary significantly around the globe. Depending on country and network technology, SIMs were available free of charge, while in others, providers required the purchase of a handset, especially in countries with CDMA networks such as the US, Canada, Indonesia, China and Brazil.
International roaming in prepaid plans is also on the rise and presents an attractive option in usage plans although the roaming charges and pricing varies considerably from country to country.
Topping Up: Developing and emerging markets have the edge
The variety of methods – bank applications for smartphones, ATMs, PayPal, micro payment systems and social media - for topping up a prepaid plan is growing and gaining popularity, with the most plentiful options seen in Europe and Africa. such as Kenya and Portugal. By contrast, the US and Australia, for example, with prepaid only occupying 23 percent of the total mobile communications market, did not offer these more advanced options.
“While this study benchmarked the prepaid market, the lessons are just as valid for all the other services offered by telcos. In an increasingly competitive industry, it is important to provide a best-in-class customer experience to add and retain customers,” noted Graeme Ross, Global Chair of KPMG’s Media and Telecommunications practice and a partner with KPMG in the UK. “If a telco is not performing a task, its competitor will.”
About the report
In Search of a Better Customer Experience is a global customer experience study conducted across 25 countries and 106 mobile providers to identify better practices and trends in the prepaid mobile market. Many of these practices also apply more broadly to other telco services. Through over 850 store visits, 750 calls to contact centers, 1400 SIM purchases and over 500 top-ups completed, KPMG member firms were able to compare experiences to gain a comprehensive global view.
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About KPMG International
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 156 countries and have 152,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.