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Why satisfaction doesn’t matter
Author: Jack Borland
October 26, 2005
We’ve all been bombarded by the wireless ads offering better plans, less commitment, and more choices. Most focus on the perceived customer friction points of their competitors. Why is the wireless market so volatile?
Well, it all started with the birth of the industry. The traditional phone companies and the new start-ups both bought in to the argument that you had to put up as high a barrier to exit as possible in order to offset the tremendous build-out costs of the wireless networks. That, plus the traditional telecos’ legacy billing systems meant that no vendor was willing to treat wireless access as a commodity service.
The result? Tremendous customer frustration, leading to tremendous customer churn, even in the B2B market. Studies of customer satisfaction pointed to quality of service issues – which have been generally addressed as the market has matured. However, customer satisfaction is now approaching that of a number of other service industries – without a corresponding decrease in the churn rates that vendors are experiencing. In a recent study, Walker Information found that while 79% of B2B wireless customers were satisfied, only 41% are truly loyal. Their conclusion? Customer satisfaction is a poor indicator of future behavior.
What does this mean for you? If you’re using standard customer satisfaction questionnaires to predict your customers’ likelihood of defection, you need to start thinking about other measures. Understanding your customers’ total experience and how that experience can develop and enhance customer loyalty is key to retaining (profitable) customers and to improving your bottom line. And the reality of the customer experience is their perception of your organization - not your perception, your intention, or your assumptions.
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