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Focus on Customer Service Is Reducing Churn in Wireless
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Focus on Customer Service Is Reducing Churn in Wireless

 
November 30, 2005

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By David Sims, TMCnet Contributing Editor
 

Wanna know how to reduce churn? Have your customer service people be nicer when serving your customers.
 
There you go. Frame that, we know it's the first time you've heard it.
 
Wireless service providers are having some success in reducing customer service churn and complaint rates, but they still have significant challenges ahead, according to a new report from In-Stat: About one in eight wireless customers considered their wireless carrier's customer service "excellent," although the results for individual U.S. carriers ranged from a low of 7% to a high near 21%.
 
The research firm found several customer service topics that received praise and complaint for each wireless carrier regarding -- stop me if you've heard this before -- hold times, service policies, first-call problem resolution, and customer service representative attitude.
 
The In-Stat report, "Wireless Customer Service: Not Over the Hump Yet," surveyed U.S. wireless subscribers and conducted what the firm says were "extensive interviews with key wireless industry insiders."

"Customer service efforts appear to be contributing both to churn rate reduction, a key factor in company financial performance, and in the reduction of the relative complaint rate," said David Chamberlain, In-Stat analyst. "Nevertheless, a substantial number of subscribers are, or could soon become, defectors."

The report found that in most cases, satisfaction with customer service nearly mirrors subscribers' overall attitude toward the carrier. In other words, efficient handling of billing problems is now considered one of the best parts of the customer service experience, and lengthy hold times and one-call resolution are… wait for it… the worst.
 
Not to belabor the point, but this reporter remembers writing articles back in the halcyon days of 1998, 1999, 2000 about how telecommunications carriers could reduce churn by providing better customer service, hectoring people with Study A and Report B proving that carriers with higher customer satisfaction ratings had higher customer loyalty, blah blah blah.
 
It's like diet books -- you can buy any and all the diet books in Barnes & Noble, go down and clean 'em out, Scarsdale, South Beach, Atkins, the ever-popular grapefruit diet, but no diet book has ever done a bit of good for anyone except authors, publishers and people who followed what the book said.
 
No doubt five, seven, ten years from now some company's going to issue an "extensively researched study" proving that "after much analysis," it's been found that to reduce customer churn, improve customer service, and this reporter will report on the study… ah well, see what career options are open to those of us without the attention span for law school? Stay in school, kids.
 
It also found customers are indifferent about Web-based or voice-response self-care initiatives, and what industry insiders have long known, that both the newest and longest-term customers are the least likely to churn.
 
However, among those in the middle -- customers who have been with the carrier from one to two years -- more than 25% indicate they probably or definitely will switch to another carrier.

Wireless carriers covered in depth in the report include Sprint PCS, Nextel, Verizon Wireless, T-Mobile and Cingular/AT&T Wireless. About In-Stat

David Sims is contributing editor for TMCnet. For more articles please visit David Sims' columnist page.

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