Yesterday I read a piece by Mastercard’s Kush Saxena on Forbes. Addressing retailers, he makes the following observations about the post-COVID world:
“Brands will need to work to earn customers’ loyalty and trust. That work must be done at every stage of the customer journey, from the first time they look up information about a store online to the moment they walk out the door with their purchase or receive their package at home. Brands must focus on their customers’ physical, digital and emotional well-being now more than ever.“
Saxena argues that building loyalty, having a deep understanding of customers and their changing priorities and addressing their emotional needs is essential for success. All of this is very sensible stuff. But for me it was quite disheartening. For while retailers are rapidly adapting to the New Normal and the fact that customers have adopted a more local-based approach to living, working and playing (see B2C – why there’s no such thing (and what you need to do about it)), telecoms firms have been far slower to adapt.
Initially, we saw hubris in their approach to the COVID-19 crisis, as executives assured their customers there was plenty of capacity in their networks and everything was under control. This created a state of cognitive dissonance: customers were being told their networks were good when their actual lived experience said they weren’t. Inevitably, this undermined both trust and forbearance.
Now we see some operators readying themselves to raise prices in spring 2021 (or even before). They have networks to build and shareholders to keep happy, after all. (see Working at home set to get more expensive as BT claws back the cash) But they haven’t stopped to consider whether this price hike is appropriate given that many of their customers are going to struggle as they’re laid off. They are yet again playing the game of gouging loyalty while lavishing new customers with special offers. Relying on inertia or lack of choice to get customers paying more.
It’s not just by putting up prices telcos show disdain for loyalty. Take this offer from Sky. Having partnered with the supermarket Lidl to offer a loyalty-based price reduction (see Sky TV is giving new and existing customers 25% off via Lidl’s new loyalty app) the sting is in the (essential) dish pricing: set-up is £20 for new customers or “up to” £219 for existing customers.
Even our marketing messaging is completely out of sync with customer reality. The hard truth is that customers don’t want to hear about 5G or the super fast speeds it might deliver. (Have we already forgotten about those burning towers?) They want to know how telecoms firms can improve their lived experience. They don’t care about theoretical speeds or meaningless “Gs” but whether they can work from home, videoconference their granny, stream a movie they want to see, or get a good quality connection wherever they are. Yet telecoms marketers continue to push out story after story about how (theoretically) fast their networks are. This is vanity not marketing.
Fortunately there are some bright spots. Optus VP of digital consumer, Vaughan Paul, recently told CMO.com: “While there’s a point in time when you will have a need to attract new customers, this can’t be just the way you want to live. You have to provide, a lot of the time, as good or better offer for your existing base”. His somewhat unusual and refreshing perspective might be explained by the fact he doesn’t come from a technology background, but from a people-centric background (HR).
Making the shift to better CX in telecoms and building loyalty is both strategically urgent and tactically essential to building and sustaining revenue.
For example, Kearney’s NextGen 2020 study shows that 48% of global consumers would consider buying connectivity from non-telecoms companies (media companies such as Netflix or device manufacturers such as Apple). The message is clear. These companies are easier to do business with and more customer-centric. But here’s the really interesting thing. Where the IoT market is more mature – in Asia Pacific – Kearney’s found the potential to grow revenue in the connected device market was 363%. Even in Western Europe it is still 51%.
The bottom line is: selling more to customers because they want to buy more from you is always going to offer a better return than focusing on acquisition and gouging loyalty.