Ericsson consumer lab identifies what consumers really want from their operators

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  • 1. consumerlabOPTIMALCONSUMEREXPERIENCEAn analysis of how operators can maintainand improve customer satisfactionAn Ericsson Consumer Insight Summary ReportFebruary 2012
  • 2. contentsEnhancing the consumer experience 3 Ericsson ConsumerLab has conducted research that identifies what really drives the consumer experience when using communication services. This research alsoFocus on the US market 4 shows what needs to be implemented to further enhance this experience.Satisfaction vs importance 5 In order to fully understand what makes the consumer experience dynamic, Ericsson ConsumerLab hasCombining satisfaction and importance 6 released a set of unique results that measure consumer satisfaction and importance. These identify the improvements that operators can undertake in orderOptimizing the consumer experience 7 to optimize the experience.Meeting tomorrow’s needs 9 The research was conducted in three countries: the US, Russia and Brazil. This report focuses on the US study and briefly presents findings from the RussianHighlights from Brazil and Russia 10 and Brazilian markets. ericsson consumerlab – the voice of the consumer Ericsson ConsumerLab is a knowledge-based To be close to the market and consumers, Ericsson organization that provides consumer insight ConsumerLab has team members working in most to influence strategy, marketing and product of Ericsson’s market regions. Being part of the management within the Ericsson Group. Ericsson Ericsson Group gives the organization a thorough ConsumerLab has more than 15 years’ experience understanding of the ICT market and business in consumer values and behavior research, models. This broad knowledge is unique and is including the way people act and think about ICT the basis for Ericsson’s credibility and integrity. products and services. This insight helps operators Ericsson ConsumerLab is able to share the big to develop attractive revenue-generating services. picture, with an understanding of where the individual fits in and what this means for future Knowledge is gathered through a global research trends and services. program which interviews 100,000 individuals in more than 40 countries and 10 megacities annually www.ericsson.com/consumerlab – statistically representing the views of 1.1 billion people. This is based on both quantitative and qualitative research, and hundreds of hours of in- depth interviews and focus groups with consumers from different cultures. This research includes general market and consumer trends, and in-depth insights into specific areas.2 CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE
  • 3. Enhancing theconsumer experienceToday, operators compete in a very different market to Ericsson ConsumerLab has conducted a study thatthe one they faced only a few years ago. uncovers consumer insights that operators can capitalize on in order to shape the future consumerConsumers can choose from an abundance of experience. The results allow us to understand whatbrands, products and services when communicating, represents an ideal consumer experience today andsharing, and socializing. Because of this, the market tomorrow for selected target groups of consumers.is increasingly driven by consumer needs and desires.People expect to be able to manage their service howthey want, when they want and from any device.In such a competitive market, operators need to adaptby rethinking the way they interact with consumers.This study looks beyond the key parameters of priceand quality to get a thorough picture of what reallymatters for the consumer experience. The Key findings > True picture > service and support most important Measuring satisfaction levels is not enough, Service and support has been measured as by combining this with what is important to having the highest impact on the relationship users, we get a true picture of the optimal with an operator today. The key driver being a consumer experience. “service representative that is knowledgeable about the individual”. > over half are satisfied 62% of subscribers are satisfied with their > unmet needs operator. This level varies when asking the There are still unmet needs that could consumer how satisfied they are in a particular further improve the consumer experience. situation/interaction with their operator. These include transparency, efficiency and proactivity. > Different priorities The study clearly shows that different consumer segments have different priorities when it comes to what is most important in their relationship with their operator. CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE 3
  • 4. focus onthe us MARKETEricsson ConsumerLab met and spoke with 72 This latter disappointment is a reflection of consumerconsumers from different demographic groups in expectations which have been set by other industries,Chicago and San Francisco to acquire an in-depth such as the travel and credit card market. Theseunderstanding of their experience when interacting sectors regularly reward loyalty with better service orwith service providers. monetary incentives.This has enabled us to identify the main expectations Based on feedback from the consumers, a list of 58and frustrations that consumers have with operators separate questions were identified that could be usedthat are not meeting their needs. in an online survey. We categorized the results into five different touch point areas: service and support,There were recurring unmet needs voiced by initial purchase process, billing and payment, accountconsumers during the interviews. These included lack management and loyalty building.of transparency in billing, a generalized customer careapproach and a lack of loyalty building. Satisfaction was measured on three levels: 1. Overall satisfaction with the operatorFor example, consumers have complained that whiletheir service bills had increased over time, better 2. For each touch point arearates were made available to new customers through 3. For each of the 58 questionspromotions. Loyal customers are therefore penalized bybeing forced to pay full rates. We observed that satisfaction levels decrease when asking the consumer how satisfied they are with aFigure 1: Overall satisfaction levels for each of the touch point areas specific situation/interaction with the operator. The more specific the questions, the more varied the100% answers were regarding satisfaction. Overall, it was found that 62% of respondents were satisfied with 80% their operator. More than half of the consumers studied are 60% satisfied with their operator; however satisfaction levels decline slightly as the consumer engagement process continues. 40% Rewarding consumer loyalty through personalized 20% service and attention is the touch point area that consumers indicate needs the most enhancements. 0% Initial Billing Account Service Loyalty We also observed that a large portion of consumers are purchase process & payment management & support building indifferent, indicating that communication services are a low priority today. However, there is an opportunity to Completely satisfied Indifferent Completely dissatisfied increase satisfaction for these consumers in the future. CuStomER ExpECtAtIonS Of those that had contacted their operator in the last 6 months, 61 percent had wanted to In general, US consumers who have contacted upgrade or downgrade their services, 58 percent their operator are less satisfied than those who were calling to resolve a technical issue and 51 have not. Those same consumers are also percent were interested in information about new shown to have generally higher expectations services or products. Some consumers may have of their operator. contacted their operator more than once.4 CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE
  • 5. satisfaction vsimportanceSimply measuring how satisfied consumers say The results show that service and support is the mostthey are with their experience does not give us a important touch point area in the overall consumerfull understanding of which expectations are most experience today. Service and support is mostlyimportant to optimizing the experience. Therefore we driven by customer service representatives beinghave added another dimension that measures the knowledgeable about the individual. Initial purchaseimportance of each question. process is a close second.Figure 2: Importance levels of the five touch points TOday Initial purchase Billing Account Service Loyalty process & payment management & support building 29% 13% 2% 49% 8%Different consumers – different needs Figure 3: Defining the touch point areasDifferent consumer profiles have different needs.All touch point areas are important for the overallconsumer experience but the touch point areas thatare the most important differ between segments. Initial purchase processThe initial purchase process is driven by an individual’sability to customize the service to meet their ownspecific needs. This is the most important areafor more senior and less tech-savvy individuals. Billing & paymentBilling and payment is of great importance tocareer-minded people. These groups of people arecomfortable using technology as part of their everyday questionSlives, and expect complete transparency regarding the Account managementfinancial aspect of their account. Identified in qualitative research to measure theLoyalty building and account management are consumer experienceespecially important for young professionals, as Service & supportmost are in the process of establishing their livesand have started to pay for services themselvesrelatively recently. Loyalty building CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE 5
  • 6. combining satisfactionand importanceFigure 4: Combining satisfaction and importanceMore satisfied latent strengths MAINTAIN de-prioritize PrioritizeLess satisfied Less important More important IDEntIFyIng SuCCESS By studying both the satisfaction and importance of each expectation, we are able to identify which areas operators have successfully implemented today, and what needs to be prioritized to raise the experience.6 CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE
  • 7. OPtimizing theconsumer experience there’s always something you don’t really want, like with my operator I did not want my landline.” parent San FranciscoOperators already have many satisfaction drivers in Satisfaction drivers that have beenplace but there is still great potential for improvement successfully implementedacross all touch point areas. Customization give consumers the opportunity to personalizeFigure 5: shows the main expectations that have been services to meet their specific individual needssuccessfully met by operators. provide detailed information about each consumer toFigure 5: Successfully met expectations the customer support reps Speed Customer service representatives can make immediate decisions to solve problems more quickly Simplicity Continue with offerings that are easier to understand MAINTAIN 24/7 customer support Prioritize maintain 24/7 availability of customer support for Implemented drivers of satisfaction that need to be trouble shooting Drivers of satisfaction for the future continuously maintained and enhanced consumer experience HIGH SATISFACTION, HIGH IMPORTANCE LOW SATISFACTION, HIGH IMPORTANCE Customization Speed Transparency Efficiency Simplicity 24/7 customer support Proactivity Consumers in control CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE 7
  • 8. OPtimizing theconsumer experienceFigure 6: Drivers to be prioritized It is not enough to just maintain the areas that work today. Service providers need to implement prioritized drivers to provide consumers with an optimized experience. Figure 6 shows the main drivers of satisfaction that Prioritize need to be implemented in order to achieve the optimal consumer experience in the future. Drivers of satisfaction for the future consumer experience Creating the optimal consumer experience LOW SATISFACTION, HIGH IMPORTANCE Transparency Avoid hidden clauses in contracts and other communications to the consumer Transparency Efficiency Efficiency Guarantee that a problem will be resolved within a specific time period, with penalties if not achieved Proactivity Proactivity Consumers in control Recommend cost savings based on past consumption Consumers in control Offer consumers the tools they need to keep track of usage and spending in real time I was disappointed when the trial price period changed without any notice and the rates went up. They’re poor at explaining prices, services, and options.” young professional Chicago8 CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE
  • 9. Meeting tomorrow’sneedsToday, loyalty building, account management, and These touch point areas currently contribute more tobilling and payment contribute less to the overall the consumer experience of young professionals andconsumer experience than initial purchase process and other tech-savvy consumer segments. We know fromservice and support. previous research that the usage patterns of such groups are an indication of the likely direction of futureIn addition to maintaining the satisfaction drivers consumption patterns.that create a good consumer experience today, thereis an opportunity in the future for operators to capitalizeon consumer expectations that have not yet beenfully met.When analyzed in detail, these consumer expectationscall for proactivity and transparency to provideconsumers with a greater feeling of control over theiraccount. They are classified within the loyalty, accountmanagement, billing and payment touch point areas. CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE 9
  • 10. highlights frombrazil and russiaFigure 7: Importance levels of the five touch points in Brazil Initial purchase Billing Account Service Loyalty process & payment management & support building 1% 19% 32% 47% 1%BrazilService and support is most important for the There is also high satisfaction with polite and friendlyconsumer experience in Brazil followed by account customer service representatives. However, a quickermanagement and billing. response time is required to create the ideal consumer experience. A mandate to make immediate decisionsThe Brazilian consumer experience is characterized by would help customer service representatives tohigh levels of control over usage and spending. This is achieve this.mainly due to the fact that the majority of users are onprepaid payment plans.10 CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE
  • 11. Figure 8: Importance levels of the five touch points in Russia Initial purchase Billing Account Service Loyalty process & payment management & support building 1% 44% 4% 50% 1%RussiaThe service and support touch point area is mostimportant for the consumer experience in Russia,followed by billing and payment.Russian consumers have high levels of control overtheir spending, due to the majority being on prepaidpayment plans.In the Russian market there is a marked frustrationregarding the lack of warning about service outages.Operators can improve on this by providing advancedwarning before service interruptions, and offercompensation for lost usage. Regional survey variations Internet penetration is a lot higher in the US than brazil in Brazil and Russia. The Russian and Brazilian > Sample is representative of approximately respondents therefore represent the more tech- 42 million people savvy proportion of their country’s population. > 900 interviews us > Daily to weekly internet and mobile > Sample is representative of approximately phone users 100 million people > 1,100 interviews russia > Online population who own and use a mobile > Sample is representative of approximately phone and subscribe to an internet service 25 million people > 900 interviews > Daily internet users, highly educated, mobile phone users CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE 11
  • 12. Ericsson is the world’s leading provider of communicationstechnology and services. We are enabling the Networked Societywith efficient real-time solutions that allow us all to study, work andlive our lives more freely, in sustainable societies around the world.Our offering comprises services, software and infrastructure withinInformation and Communications Technology for telecom operatorsand other industries. Today more than 40 percent of the world’smobile traffic goes through Ericsson networks and we supportcustomers’ networks servicing more than 2 billion subscribers.We operate in 180 countries and employ more than 100,000 people.Founded in 1876, Ericsson is headquartered in Stockholm, Sweden.In 2011 the company had revenues of SEK 226,9 billion (USD35,0 billion). Ericsson is listed on NASDAQ OMX, Stockholm andNASDAQ, New York stock exchanges.The content of this document is subject to revision withoutnotice due to continued progress in methodology, design andmanufacturing. Ericsson shall have no liability for any error ordamage of any kind resulting from the use of this document.EricssonSE-126 25 Stockholm, SwedenTelephone +46 10 719 00 00Fax +46 8 18 40 85 EN/LZT 138 0783 R1Awww.ericsson.com © Ericsson AB 2012