Telcos are out of touch with their customers. Is it too late to fix it?
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A combination of sky-high expectations from customers and slow-moving organisations built on creaking infrastructure make this a worrying time for telcos. You only have to look at industry share prices to know that the telecoms space is lagging behind other industries.
Whatever the reasons for this sluggish growth, there can be no doubt that the industry is facing a series of big questions in the next few years. One of the biggest being, how can the sector retain existing customers and attract new ones?
We recently commissioned research to understand the relationship between telcos and their customers and, crucially, find out if their connection will last.
How telcos became disconnected
We asked consumers to tell us how they felt about their phone provider, and the picture isn’t looking so rosy for telcos.
Most consumers, 64 percent, are planning to switch phone providers in the next three years. Breaking the data down further, young consumers (under 35s) are even more likely to switch, and three-quarters (75%) plan to find another provider soon.
Normally, this wouldn’t be much of a concern - most people switch energy providers once every few years. But this is a stark contrast to the display of confidence we heard from telcos. A resounding 96 percent of senior decision makers in the telecoms space believed they have a loyal customer base. Only 4 percent admitted that their customers might be planning to go elsewhere soon.
Most of the executives we interviewed told us that the telecom's industry is as innovative, if not more so, than other sectors such as finance, automotive and consumer apps like Uber. What’s more, only 16% of telecoms decision-makers recognized a need for more innovation in the industry.
Telcos are deluded.
Customers are not prepared to sit tight and wait for better services. Many people told us that they’re actively looking to switch, with 59 percent of those switching planning to do so for a better deal. For its part, the pandemic has served only to accelerate the pace of new online services from other industries and therefore exacerbate expectations from consumers.
So, where do telcos go from here?
Reconnecting won’t be easy, but it is necessary.
Telcos are doing the bare minimum. They are getting outplayed by other industries and, if they’re not willing to change the way they deliver services, they’ll lose customers and get lost in a constant price war with competitors where there are no winners.
So what can be done to reverse the rot and reconnect with customers? It’s clear that most consumers are expecting better from their providers. They want better products and services, delivered digitally.
Within the next three years, 59 percent of companies are looking to roll out improved customer service and 52 percent improved online services. Although it’s encouraging to see businesses want to activate a change in their approach, change must be swift and decisive.
Change does not simply mean replacing legacy infrastructure with new technologies. They must also replace a legacy culture with one that is open-minded, agile, and responsive to customers' changing needs.
The telecom's industry is at an inflection point, how it responds will decide its future.
About the author
Sara holds the position as CCO in Telness Tech where she's responsible for business development and growth.