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Global wireless network operator and mobile satisfaction / customer loyalty survey research white paper June 2010
 

Global wireless network operator and mobile satisfaction / customer loyalty survey research white paper June 2010

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This is the complete 26 page research paper from a global Network Operator Customer Loyalty study. The survey was fielded in Spring 2010, asking a sample of 5,000 people from 111 countries about their ...

This is the complete 26 page research paper from a global Network Operator Customer Loyalty study. The survey was fielded in Spring 2010, asking a sample of 5,000 people from 111 countries about their user experience with respect to their current network operator, mobile phones and mobile applications. Mob4Hire as well as Business Over Broadway (ne: TCELab) co-sponsored the survey results.

Table of Contents
==============
Methodology 2
Panel Description 2
Key Metrics Used in the Study 2
Executive Summary 3
Top Wireless Insights 3
Top Mobile Insights 3
Table of Contents 4
Figures 5
Operator Performance & Loyalty Grids 6
Network Operator Performance Grid 7
Network Operator Customer Loyalty Grid 8
Network Operator RAPID Loyalty Measurement Rankings 9
Network Operator Loyalty Insights 10
Network Operator Business Attributes 13
Drivers of Customer Loyalty 15
Operator Mobile App Performance Grid 16
Mobile App User Experience Insights 17
Impact of Mobile Applications on Ecosystem 20
Mobile Handsets 21
Smartphone vs. Feature Phones 22
RAPID Loyalty Measurement Primer 23
Customer Loyalty 23
Customer Lifetime Value 24
References 25
Who we are 26


For More, please visit http://www.tcelab.com

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    Global wireless network operator and mobile satisfaction / customer loyalty survey research white paper June 2010 Global wireless network operator and mobile satisfaction / customer loyalty survey research white paper June 2010 Document Transcript

    •      The  Impact  of  Mobile  User  Experience  on  Network  Operator  Customer  Loyalty  Summer  2010  A  global  study  in  111  countries  by  Mob4Hire  and  Business  Over  Broadway  reports  on  the  mobile  user  experience  (mobile  handsets,  mobile  apps,  app  stores  and  network  operators)  and  how  network  operators  can  use  this  information  to  accelerate  growth.              
    • 2  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayMethodology  Business  Over  Broadway  (BOB.;  www.businessoverbroadway.com),  customer  satisfaction  and  loyalty  experts,  helped  design  the  survey  instrument  and  research  design.  This  particular  study  on  network  operators,  which  included  both  loyalty-­‐  and  quality-­‐related  questions,  was  powered  by  Mob4Hire  (www.mob4hire.com)  who  provided  the  online  data  collection  and  consumer  panels.  Panel  Description  Mob4Hire  has  a  proprietary,  worldwide  sample  of  over  45,000  panelists  (or  Mobsters)  who  represent  early  adopting,  mobile  savvy  users  who  live  a  mobile  lifestyle.  Mobsters  are  recruited  through  an  opt-­‐in  process  through  the  Mob4Hire.com  website.  Mobsters’  opinions  about  their  mobile  experience  help  us  identify  factors  that  predict  customer  purchasing  behavior  and  revenue  growth  across  the  entire  mobile  ecosystem.  All  respondents  for  this  study  were  rewarded  with  an  incentive  for  filling  out  the  survey.  The  survey  was  fielded  in  Spring  2010,  asking  a  sample  of  5000  Mobsters  ages  18  or  older  about  their  user  experience  with  respect  to  their  current  network  operator,  mobile  phones  and  mobile  applications.  The  survey  respondents  were  primarily  male  (82%)  with  a  median  age  of  25  years.  A  highly  educated  sample,  57%  of  the  respondents  have  a  4-­‐year  degree  or  higher.  The  worldwide  sample  of  respondents  represented  111  countries,  204  network  operators  and  179  distinct  mobile  handsets.  All  references  to  “people,”  “users,”  “respondents,”  and  “subscribers”  in  this  report  refer  specifically  to  this  panel  sample  regarding  their  mobile  phone  use.  Key  Metrics  Used  in  the  Study  Customer  loyalty  is  a  leading  indicator  of  financial  growth.  This  report  contains  comparative  analysis  across  network  operators,  identifies  top  network  operators  with  respect  to  customer  loyalty,  customer  service,  and  coverage/reliability  quality.  Additionally,  key  drivers  of  the  components  of  customer  loyalty  will  be  presented.  The  three  measures  of  customer  loyalty  (and  their  definitions)  are:  1. Retention  Loyalty  (RLI):  The  extent  to  which  your  customers  will  remain  customers.  Will  your  customers  switch  to  another  provider?  2. Advocacy  Loyalty  Index  (ALI):  The  extent  to  which  your  customers  will  be  advocates  for  your  product.  Will  your  customers  recommend  your  products  and  services  to  their  friends?  3. Purchasing  Loyalty  Index  (PLI):  The  extent  to  which  your  customers  will  purchase  more  from  you.  Will  your  customers  purchase  different  products  and/or  increase  the  amount  they  purchase  from  you?  These  three  dimensions  form  the  basis  of  the  RAPID  Loyalty  Measurement  Method;  a  primer  on  this  research  approach  can  be  found  in  the  last  section  of  this  report.  The  RAPID  Score  indicates  the  general  health  of  the  customer  relationship.  By  measuring  all  three  dimensions  of  customer  loyalty,  companies  are  better  able  to  understand  their  customers’  loyalty  behaviors,  manage  their  customer  relationships  more  effectively  and,  consequently,  experience  accelerated  business  growth  through  new  and  existing  customers.    
    • 3  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayExecutive  Summary  Mobile  applications  and  handsets  are  becoming  increasingly  important  factors  in  network  operator  customer  loyalty.    Top  drivers  of  network  customer  loyalty,  however,  continue  to  be  coverage/reliablity  and  customer  service  quality.  Top  Wireless  Insights  1. Vodafone  and  Zain  are  the  best  network  operators  in  the  world,  appearing  in  the  top  25%  quadrant  on  all  3  of  our  measurement  grids:  Network  Performance,  Network  Customer  Loyalty  and  Mobile  App  Performance.  2. Sixty-­‐five  percent  of  respondents  indicated  that  mobile  applications  are  important  in  their  decision  to  select  a  network  operator.  3. Respondents  are  more  likely  to  tell  their  friends  about  their  network  operator  than  they  are  to  purchase  additional  services  from  that  network  operator.  4. Seventy-­‐nine  percent  of  the  respondents  indicated  they  are  likely  to  recommend  their  network  operator  to  a  friend.    Fifty-­‐five  percent  of  respondents  said  they  are  likely  to  purchase  additional  services  from  their  network  operator.  5. Thirty-­‐seven  percent  of  respondents  think  their  network  operator’s  coverage  is  inadequate.  Half  of  the  respondents  said  customer  service  is  not  adequate.  6. Twenty-­‐seven  percent  of  respondents  said  they  are  likely  to  switch  to  another  network  operator  within  12  months.  Top  Mobile  Insights  1. Smartphone  users  need  to  see  at  least  a  4-­‐star  user  review  rating  in  an  app  store  before  they  download  /  purchase  a  mobile  application.  2. Eighty-­‐nine  percent  of  mobile  users  report  they  have  experienced  a  mobile  app  crash  on  their  phone.  3. Smartphone  respondents  reported  higher  loyalty  toward  their  mobile  device  (e.g.,  mobile  device  and  performance  of  mobile  applications)  compared  to  feature  phone  respondents.  However,  there  were  no  differences  between  phone  types  with  respect  to  loyalty  toward  the  respondent’s  network  operator.  
    • 4  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayTable  of  Contents    Methodology  .................................................................................................................................  2  Panel  Description  ....................................................................................................................................  2  Key  Metrics  Used  in  the  Study  .................................................................................................................  2  Executive  Summary  .......................................................................................................................  3  Top  Wireless  Insights  ...............................................................................................................................  3  Top  Mobile  Insights  .................................................................................................................................  3  Table  of  Contents  ..........................................................................................................................  4  Figures  ...........................................................................................................................................  5  Operator  Performance  &  Loyalty  Grids  ..........................................................................................  6  Network  Operator  Performance  Grid  .......................................................................................................  7  Network  Operator  Customer  Loyalty  Grid  ................................................................................................  8  Network  Operator  RAPID  Loyalty  Measurement  Rankings  .......................................................................  9  Network  Operator  Loyalty  Insights  ..............................................................................................  10  Network  Operator  Business  Attributes  ........................................................................................  13  Drivers  of  Customer  Loyalty  .........................................................................................................  15  Operator  Mobile  App  Performance  Grid  ......................................................................................  16  Mobile  App  User  Experience  Insights  ...........................................................................................  17  Impact  of  Mobile  Applications  on  Ecosystem  .........................................................................................  20  Mobile  Handsets  ..........................................................................................................................  21  Smartphone  vs.  Feature  Phones  ............................................................................................................  22  RAPID  Loyalty  Measurement  Primer  ............................................................................................  23  Customer  Loyalty  ...................................................................................................................................  23  Customer  Lifetime  Value  .......................................................................................................................  24  References  ...................................................................................................................................  25  Who  we  are  .................................................................................................................................  26    
    • 5  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayFigures  Figure  1    Reasons  for  switching  to  a  different  network  provider.  ........................................................................  6  Figure  2  Network  Operator  Performance  Grid  (Customer  Service  Quality  and  Coverage  /  Reliability)  ...............  7  Figure  3.  Hayes  Loyalty  Grid  for  Network  Operators  ............................................................................................  8  Figure  4.  RAPID  Loyalty  Indices  ...........................................................................................................................  10  Figure  5.  Loyalty  Questions  .................................................................................................................................  10  Figure  6.  Retention  Loyalty  Questions  ................................................................................................................  11  Figure  7.  Advocacy  Loyalty  Questions  ................................................................................................................  11  Figure  8.  Purchasing  Loyalty  Questions  ..............................................................................................................  12  Figure  9.  Product  and  Service  Quality  Ratings  for  Network  Operators  ..............................................................  13  Figure  10.  Customer  Service  Quality  Ratings  for  Network  Operators  ................................................................  13  Figure  11.  Coverage  and  Reliability  Ratings  for  Network  Operators  ..................................................................  14  Figure  12.  Network  Operator  Mobile  Application  Performance  Grid  .................................................................  16  Figure  13.  Star  Ratings  Needed  before  Purchasing/Downloading  Mobile  Apps  .................................................  17  Figure  14.  Crash  Frequency  Ratings  ....................................................................................................................  17  Figure  15.  Number  of  mobile  applications  downloaded  in  the  past  three  months  ............................................  18  Figure  16.  Number  of  mobile  applications  purchased  in  the  past  three  months.  ..............................................  18  Figure  17.  Number  of  mobile  applications  downloaded  in  past  three  months.  .................................................  19  Figure  18.  Number  of  mobile  applications  purchased  in  the  past  three  months.  ..............................................  19  Figure  19.  Reasons  for  switching  network  operators  .........................................................................................  20  Figure  20.  Satisfaction  Ratings  of  Mobile  Ecosystem  by  Handset  Manufacturer  ...............................................  21  Figure  21.  Loyalty  Ratings  by  Smartphone  and  Feature  Phone  Respondents  ....................................................  22  Figure  22.  Customer  Loyalty  and  Customer  Lifetime  Value  ................................................................................  24    
    • 6  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayOperator  Performance  &  Loyalty  Grids    Of  the  respondents  indicating  they  are  likely  to  switch  to  a  different  network  operator,  top  reasons  cited  for  switching  were  Coverage/Reliability  Quality  and  Customer  Service  Quality.    Figure  1    Reasons  for  switching  to  a  different  network  provider.  For  the  Wireless  Performance  Grid  shown  in  Figure  2,  we  charted  two  performance  indices  (Coverage/Reliability  Quality  and  Customer  Service  Quality)  for  each  network  operator.  Coverage/Reliability  index  was  calculated  by  averaging  the  satisfaction  rating  of  Coverage  and  Reliability  (e.g.,  few  dropped  calls)  questions.    The  Customer  Service  Index  was  calculated  by  averaging  the  ratings  of  five  customer  service  questions:  1) Timely  Response  2) Knowledgeable  service  agent  3) Courtesy  4) Understanding  customer  needs  5) Always  there  when  needed      64%  53%   51%  46%  37%  28%  17%  0%  10%  20%  30%  40%  50%  60%  70%  Poor  value  for  the  price  Poor  customer  service  Poor  network  coverage  Unreliable  service  Does  not  have  apps  I  want  Poor  variety  of  phones  Poor  reputafon  Percent  of  Respondents  
    • 7  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayNetwork  Operator  Performance  Grid  The  Network  Operator  Performance  Grid  reflects  the  relative  performance  on  coverage/reliability  and  customer  service  quality.  As  you  can  see  in  the  grid,  there  was  considerable  variability  across  the  network  operators  for  these  two  indices.    The  network  operators  who  received  the  highest  ratings  in  both  coverage/reliability  and  customer  service  was  Mtel,  Tigo,  Warid  Telecom,  Mobitel,  and  Zain.    Figure 2 Network Operator Performance Grid (Customer Service Quality and Coverage / Reliability)      
    • 8  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayNetwork  Operator  Customer  Loyalty  Grid  We  charted  the  two  loyalty  indices,  ALI  (Advocacy)  and  PLI  (Purchasing),  for  each  network  operator  to  display  the  different  type  of  growth  each  provider  is  likely  to  experience  within  one  year.  Advocacy  loyalty  helps  predict  growth  based  on  new  customer  acquisition  due  to  the  effect  of  word  of  mouth  and  viral  advertising.  Purchasing  loyalty  predict  revenue  growth  based  on  additional  purchases  by  existing  customers.  The  Network  Operator  Loyalty  Grid  reflects  the  relative  growth  potential  of  companies.  The  companies  in  the  upper  right  quadrant  are  predicted  to  experience  accelerated  business  growth  with  respect  to  customer  acquisition  and  increased  purchases  from  existing  customers.    Companies  in  the  lower  left  quadrant  are  predicted  to  have  slower  growth  compared  to  their  competition  in  both  customer  acquisition  and  increased  purchases  from  existing  customers.    Figure 3. Hayes Loyalty Grid for Network Operators  
    • 9  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayNetwork  Operator  RAPID  Loyalty  Measurement  Rankings  In  Table  1,  we  rank  the  network  operators  on  their  RAPID  Loyalty  Growth  Score  (average  of  RLI,  ALI  and  PLI).  Only  network  operators  with  a  sufficient  number  of  responses  to  provide  reliable  results  were  included.    Table 1. Network Operators Loyalty Scores (ranked by RAPID Loyalty Growth Score)Rank   Network  Operator  Retention  (RLI)  Advocacy  (ALI)  Purchasing  (PLI)  RAPID  Loyalty    Growth  Score  1 Tigo 6.6 7.9 6.6 7.02 Mobitel 7.2 7.7 4.6 6.53 Sun Cellular 6.2 7.5 5.4 6.44 O2 6.6 7.4 5.1 6.45 Zain 6.3 7.3 5.6 6.46 Globe Telecom 6.1 7.3 5.6 6.37 Ufone 6.6 7.3 5.1 6.38 Vodafone 6.3 7.3 5.3 6.39 Warid Telcom 6.7 7.2 4.9 6.310 BSNL 6.1 7.0 5.4 6.211 Tele2 6.8 7.4 4.3 6.112 Telenor 6.7 7.1 4.6 6.113 Indosat 6.3 6.8 5.2 6.114 Mtel 6.6 6.8 4.8 6.115 Dialog 6.4 6.9 4.8 6.016 Smart Communications 5.8 7.2 5.1 6.017 Movistar 6.1 6.6 5.3 6.018 Airtel 5.8 6.9 5.2 6.019 Mobilink 6.2 6.5 4.6 5.820 3 6.1 6.8 4.4 5.821 Claro 5.7 6.2 5.4 5.822 Telkomsel 5.4 6.7 5.2 5.723 T-Mobile 6.0 6.6 4.5 5.724 Reliance Mobile 5.5 6.0 5.5 5.725 Orange 6.1 6.4 4.4 5.626 AT&T Mobility 5.8 6.6 4.5 5.627 Rogers Wireless 5.9 6.5 4.5 5.628 Idea Cellular 5.4 6.3 5.2 5.629 MTN 5.2 6.6 5.0 5.630 XL 5.9 6.3 3.8 5.331 Telcel 5.0 6.0 4.4 5.232 Safaricom 5.1 5.8 4.5 5.1
    • 10  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayNetwork  Operator  Loyalty  Insights1. People  are  more  likely  to  tell  their  friends  about  their  network  operator  than  they  are  to  purchase  additional  services  from  that  network  operator.      2. Advocacy  Loyalty  (e.g.  satisfaction,  purchase  same,  recommend,  choose  again)  was  substantially  higher  than  Purchasing  Loyalty  (e.g.  purchase  additional  services  and  purchase  more  expensive  plans).  Customers  are  more  willing  to  sell  their  friends  on  the  merits  of  their  network  operator  than  they  are  to  spend  more  of  their  own  money  on  their  network  operator.    Figure 5. Loyalty Questions  75%   75%   71%   69%  55%  41%  34%  27%  20%  0%  10%  20%  30%  40%  50%  60%  70%  80%  Safsfied   Purchase  Same  Recommend  Choose  Again   Purchase  Addifonal  Services  Purchase  from  Compeftors  Purchase  More  Expensive  Plans  Switch  w/in  12  months  Stop  Purchasing  Services  Percent  of  Respondents  6.0  6.8  5.0  4  5  6  7  8  Retenfon   Advocacy   Purchasing  Loyalty  toward  Network  Operator  Loyalty  Metric  Figure 4. RAPID Loyalty Indices
    • 11  |  P a g e  Copyright © 2010 Mob4Hire and Business Over Broadway3. Churn  continues  to  be  an  important  element  in  the  wireless  industry.    Survey  results  show  that  about  21%  to  41%  of  customers  are  likely  to  consider  competitors  products  within  the  next  12  months.    Figure 6. Retention Loyalty Questions4. Most  respondents  report  they  are  loyal  to  their  network  operators.    Although  29%  of  people  are  likely  to  evangelize  their  network  operator,  results  indicate  that  most  customers  (70-­‐80%)  are  advocates  (moderate  to  high  likelihood)  of  their  network  operator.    Figure 7. Advocacy Loyalty Questions    59%80% 73%32%15%17%9% 6% 10%0%25%50%75%100%Purchase fromcompetitorsStop purchasing SwitchingPercentofrespondentslikelytoswitchprovidersRetention LoyaltyHigh likelihood (9-10rating)Moderate likelihood(6-8 rating)Low/No llikelihood(0-5 rating)26% 26% 29% 33%61%43% 42%42%13%31% 29% 26%0%25%50%75%100%Satisfied Choose Again Recommend PurchaseSamePercentofcustomersAdvocacy LoyaltyNo/Low likelihood(0-5 rating)Moderate likelihood(6-8 rating)High likelihood(9-10 rating)
    • 12  |  P a g e  Copyright © 2010 Mob4Hire and Business Over Broadway83%  of  respondents  said  that  they  recommended  their  current  network  operator  to  at  least  one  friend/colleague  within  the  past  12  months.      55%  of  respondents  said  that  they  recommended  their  current  network  operator  to  five  or  more  friends/colleagues  in  the  past  12  months.  4. Roughly  half  of  respondents  indicated  they  are  likely  to  purchase  additional  /  different  types  of  services  from  their  current  network  operator      55%  of  respondents  said  they  are  likely  (moderate  to  high  likelihood)  to  purchase  additional/different  types  of  service  plans  in  the  future.    Fewer  customers  (33%)  are  likely  to  purchase  more  expensive  service  plans.  Compare  this  with  the  70%  to  80%  who  are  likely  to  recommend  their  network  provider.    In  other  words,  more  respondents  will  recommend  their  network  operator  than  will  purchase  additional  /  different  services  from  them.    Figure 8. Purchasing Loyalty Questions            15%8%40%25%45%66%0%25%50%75%100%Purchcase Different Increase PurchasePercentofcustomersPurchasing LoyaltyNo/Low likelihood(0-5 rating)Moderatelikelihood (6-8rating)High likelihood(9-10 rating)
    • 13  |  P a g e  Copyright © 2010 Mob4Hire and Business Over Broadway63%  58%   58%  51%  20%  30%  40%  50%  60%  70%  80%  90%  Products  are  excellent  Services  are  excellent  Best  reputafon  Good  value  for  price  Percent  who  agreed  with  item  Business  A`ribute  Network  Operator  Business  Attributes  5. There  is  more  room  for  improvement  in  customer  service  areas  than  there  is  for  products  /  services    63%  of  respondents  indicated  that  their  current  network  operator’s  products  are  excellent.  58%  of  respondents  indicated  that  their  current  network  operator’s  services  are  excellent.    Figure 9. Product and Service Quality Ratings for Network Operators4. 61%  of  the  respondents  said  their  customer  service  reps  are  courteous.  About  a  half  of  the  respondents  do  not  believe  that  the  customer  service  reps  are  always  there  when  needed  (47%)  or  have  the  knowledge  to  answer  questions  (54%).  Similar  findings  hold  for  the  remaining  customer  service  rep  attributes.      “They need to improvetheir people handling skillsand response time”“The customer service isawful.”“They should add morecustomer service people toanswer calls right away.”“Contact with a realperson when you haveany problem is verydifficult.”50%  54%  61%  53%  47%  20%  30%  40%  50%  60%  70%  80%  90%  Timely  response  Knowledgable   Courteous   Understand  my  needs  Always  there  when  needed  Percent  who  agreed  with  item  Customer  Service  Reps  A`ributes  Figure 10. Customer Service Quality Ratings for Network Operators
    • 14  |  P a g e  Copyright © 2010 Mob4Hire and Business Over Broadway5. Nearly  three-­‐quarters  (73%)  of  the  respondents  say  that  their  service  provider  has  good  coverage  in  their  area  of  interest.  Fewer  respondents  (63%)  indicate  that  their  service  provider  has  reliable  service  (e.g.,  few  dropped  calls).      Figure 11. Coverage and Reliability Ratings for Network Operators        73%  63%  20%  30%  40%  50%  60%  70%  80%  90%  Good  coverage   Reliable  service  Percent  who  agreed  with  item  Business  A`ribute  
    • 15  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayDrivers  of  Customer  Loyalty  6. The  main  drivers  of  the  three  components  of  customer  loyalty  for  network  operators  are:  1)  Reliable  service  (few  dropped  calls),  and  2)  Customer  service  representative  attributes  (e.g.,  timely  response,  knowledgeable,  understands  needs,  always  there).  Improving  these  key  areas  is  likely  to  have  a  substantial  impact  on  improving  customer  loyalty  toward  network  operators.  7. Satisfaction  with  the  mobile  device  and  mobile  applications  also  impact  advocacy  and  purchasing  loyalty  toward  the  respondents’  network  operator.    DRIVERS  OF  LOYALTY         Key  Loyalty  Metrics  Business  Attribute   Retention   Advocacy   Purchasing  Quality  of  Coverage/Reliability   1   1   2  Quality  of  Customer  Service  Reps   2   2   1  Satisfaction  with  Mobile  Phone     3   3  Satisfaction  with  Mobile  Apps     4   5  Quality  of  Handset  Selections     5   4  Numbers  indicate  order  of  variable  in  final  model  of  stepwise  regression  analysis.  Table 2. Drivers of each Component of Customer Loyalty toward Network Operators  
    • 16  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayOperator  Mobile  App  Performance  Grid    The  research  illustrates  that  mobile  apps  are  playing  an  increasingly  vital  role  in  sustained  revenue  growth  by  network  operators.  Those  who  provide  a  great  mobile  app  experience  for  their  users  are  poised  to  grow  faster  than  their  peers.  Who  are  the  world  leaders  when  it  comes  to  delivering  a  great  mobile  app  experience?  The  two  dimensions  of  Mobile  App  Customer  Satisfaction  and  Mobile  App  Stability  varies  greatly  across  global  network  operators;  the  report  ranks  33  of  the  top  network  operators  worldwide,  shown  in  Figure  12.  According  to  the  survey  respondents,  the  network  operator  providing  the  best  mobile  app  experience  is  Zain,  serving  over  64  million  customers  in  21  countries  in  Africa  and  the  Middle  East.  Seven  other  operators  share  the  top  quadrant  with  Zain  (in  no  particular  order):  BSNL,  MTN,  Vodafone,  AT&T,  Orange,  Claro  and  Movistar.        Figure 12. Network Operator Mobile Application Performance Grid  
    • 17  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayMobile  App  User  Experience  Insights  1. The  star  rating  of  mobile  applications  in  mobile  app  stores  determines  whether  users  will  download  /  purchase  mobile  applications.  When  considering  downloading/purchasing  mobile  applications,  users  typically  need  to  see  at  least  a  4-­‐star  rating  before  they  download/purchase  the  mobile  application.    Figure 13. Star Ratings Needed before Purchasing/Downloading Mobile Apps2. While  three  quarters  (72%)  of  respondents  indicated  they  are  satisfied  with  the  performance  of  mobile  applications  on  their  mobile  device,  more  respondents  (89%)  report  that  applications  crash  on  their  mobile  phone.    Figure 14. Crash Frequency Ratings  0%  10%  20%  30%  40%  50%  At  least  1  star  At  least  2  stars  At  least  3  stars  At  least  4  stars  At  least  5  stars  Percent  of  Respondents  Number  of  stars  needed  before  downloading/purchasing  apps  0%  10%  20%  30%  40%  50%  Never   Rarely   Somefmes   Ojen   Always  Percent  of  Respondents  Crash  Frequency  
    • 18  |  P a g e  Copyright © 2010 Mob4Hire and Business Over Broadway3. There  were  differences  between  genders  in  their  mobile  application  experience.  More  men  (72%)  were  satisfied  with  the  mobile  application  performance  compared  to  women  (64%).  More  women  (54%)  regularly  experienced  mobile  applications  crashes  (57%)  compared  to  men  (47%).    4. About  86%  of  users  have  downloaded  at  least  1  mobile  application  in  the  past  three  months.  About  42%  of  users  have  purchased  at  least  1  mobile  application  in  the  past  three  months.    Not  surprisingly,  iPhone  users  are  the  most  active  mobile  app  users.  What  is  surprising,  however,  is  how  large  the  gap  is  with  other  handset  manufacturers.    iPhone  users  download  the  most  free  mobile  apps  than  any  other  handset  manufacturer.  iPhone  users  also  download  the  most  paid  apps,  with  over  60%  purchasing  more  than  2,  which  translates  into  real  dollars  for  mobile  developers.  Figure 15. Number of mobile applications downloaded in the past three months  Figure 16. Number of mobile applications purchased in the past three months.  0%  20%  40%  60%  80%  100%  Percent  of  Respondents  Mobile  Phone  Manufacturer  0  apps  1  app  2-­‐4  apps  5-­‐7  apps  8  or  more  apps  0%  20%  40%  60%  80%  100%  Percent  of  Respondents  Mobile  Phone  Manufacturer  0  apps  1  app  2-­‐4  apps  5-­‐7  apps  8  or  more  apps  
    • 19  |  P a g e  Copyright © 2010 Mob4Hire and Business Over Broadway5. Users  who  were  more  satisfied  with  the  performance  of  mobile  applications  on  their  phone  downloaded/purchased  more  mobile  applications  than  users  who  were  dissatisfied  with  the  performance  of  mobile  applications.    Figure 17. Number of mobile applications downloaded in past three months.    Figure 18. Number of mobile applications purchased in the past three months.  0%  10%  20%  30%  40%  50%  60%  70%  80%  90%  100%  Percent  of  Respondents  Saesfaceon  with  Mobile  Applicaeons  0  apps  1  app  2-­‐4  apps  5-­‐7  apps  8  or  more  apps  0%  10%  20%  30%  40%  50%  60%  70%  80%  90%  100%  Very  Dissafsfied  Neutral   Very  Safsfied  Percent  of  Respondents  Saesfaceon  with  Mobile  Applicaeons  0  apps  1  app  2-­‐4  apps  5-­‐7  apps  8  or  more  apps  
    • 20  |  P a g e  Copyright © 2010 Mob4Hire and Business Over Broadway6. About  half  (53%)  of  the  respondents  used  one  mobile  application  store  in  the  past  three  months.  47%  of  the  respondents  used  two  or  more  mobile  application  stores  in  the  past  three  months.  A  majority  of  iPhone  users  (71%)  and  Motorola  users  (63%)  typically  use  one  mobile  application  store  while  users  of  HTC  phones  (56%)  and  RIM  users  (55%  typically  use  two  or  more  mobile  application  stores.  Impact  of  Mobile  Applications  on  Ecosystem  7. When  selecting  a  network  operator,  respondents  say  that  mobile  applications  are  important  to  them  when  making  their  decision.  65%  of  respondents  indicated  that  mobile  applications  are  important  in  their  decision  to  select  a  network  operator.  8. When  defecting  from  their  current  network  operator,  37%  of  the  respondents  indicated  lack  of  mobile  apps  as  a  reason  for  their  defection.  Top  reasons  for  defecting,  however,  revolve  around  poor  value,  poor  customer  service  and  poor  coverage/reliability.  Top  reasons  for  switching  network  operators  were  related  to  poor  value  (63%)  poor  customer  service  (53%)  and  poor  coverage/reliability  (~49%).  Interestingly,  nearly  40%  of  likely  switchers  attributed  their  desire  to  switch  to  lack  of  mobile  applications.  Also,  poor  variety  of  phones  played  a  minor  role  for  customers  switching  (28%).  After  primary  product/service  features,  mobile  applications  play  a  significant  role  in  churn  rates  for  network  operators.      Figure 19. Reasons for switching network operators  64%  53%   51%  46%  37%  28%  17%  0%  10%  20%  30%  40%  50%  60%  70%  Poor  value  for  the  price  Poor  customer  service  Poor  network  coverage  Unreliable  service  Does  not  have  apps  I  want  Poor  variety  of  phones  Poor  reputafon  Percent  of  Respondents  
    • 21  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayMobile  HandsetsMobile  handset  manufacturers  continue  to  release  mobile  handsets  with  increasingly  sophisticated  capabilities  in  the  hopes  of  improving  the  mobile  experience.    The  figure  below  includes  customer  experience  ratings  for  each  major  handset  manufacturer.    Handset  manufacturers  are  ranked  by  satisfaction  with  the  mobile  device.  1. Users  who  use  the  Apple  iPhone  report  a  better  mobile  application  experience  (e.g.,  mobile  device  and  mobile  application  performance)  compared  to  users  using  other  mobile  devices.    Apple  iPhone  users  gave  the  highest  satisfaction  ratings  for  their  device  and  their  mobile  application  performance.  RIM,  HTC,  Sony/Ericsson,  Nokia  and  Samsung  users  gave  lower  satisfaction  ratings  to  their  mobile  device  and  mobile  application  performance.  LG  and  Motorola  users  gave  the  lowest  satisfaction  ratings.    There  were  no  differences  among  handset  manufacturers  with  respect  to  satisfaction  with  their  network  operator.    Figure 20. Satisfaction Ratings of Mobile Ecosystem by Handset Manufacturer4.00  5.00  6.00  7.00  8.00  9.00  10.00  Saesfaceon  Mobile  Device  Mobile  App  Performance  Network  Operator  
    • 22  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwaySmartphone  vs.  Feature  Phones  Mobile  handsets  can  be  categorized  into  two  types:  1)  Feature  phone  and  2)  Smartphone.  Our  definition  of  a  smartphone  is  a  mobile  device  with  computer-­‐like  functionality.  These  devices  sport  complete  operating  system  and  have  a  platform  for  application  developers.  A  feature  phone,  on  the  other  hand,  is  not  a  smartphone:  it  has  operating  system  firmware,  but  third  party  software  support  is  limited  to  only  Java  or  BREW  applications.  Using  these  criteria,  we  segmented  our  respondents  into  these  two  groups.  Forty-­‐one  percent  of  respondents  indicated  their  primary  phone  was  a  feature  phone  while  59%  of  respondents  indicated  their  primary  phone  was  a  smart  phone.  2. Smartphone  users  have  a  better  mobile  experience  (e.g.,  mobile  device  and  mobile  app  experience)  compared  to  feature  phone  users.  Comparing  these  two  phone  types,  we  found  that  smartphone  respondents  reported  higher  loyalty/satisfaction  ratings  with  their  mobile  device  and  performance  of  mobile  applications  compared  than  feature  phone  respondents.  However,  there  were  no  differences  between  phone  types  with  respect  to  loyalty  toward  the  network  operators;  that  is,  loyalty  toward  the  network  operator  was  not  dependent  on  the  respondents’  phone  type.    Figure 21. Loyalty Ratings by Smartphone and Feature Phone RespondentsAdditionally,  the  frequency  of  crashes  were  similar  across  the  two  phone  types  (Smartphone  =  2.53;  Feature  Phone  =  2.45  –  on  a  1-­‐5  scale.  4.50  5.00  5.50  6.00  6.50  7.00  7.50  8.00  8.50  9.00  Advocacy  Loyalty  -­‐  Mobile  Device  Safsfacfon  with  Performance  of  Mobile  Applicafons  Advocacy  Loyalty  -­‐  Network  Operator  Purchasing  Loyalty  -­‐  Network  Operator  Retenfon  Loyalty  -­‐  Network  Operator  Loyalty/Saesfaceon  Feature  Phone  Smartphone  
    • 23  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayRAPID  Loyalty  Measurement  Primer  Customer  Loyalty  The  term  “customer  loyalty”  is  typically  used  to  describe  positive  customer  feelings  for  and  behaviors  toward  a  company  or  brand.    There  are  a  plethora  of  possible  types  of  positive  customer  feelings  and  behaviors  (e.g.,  overall  satisfaction,  choose  again  for  first  time,  recommend,  purchase  same  again,  purchase  more  often,  purchase  different  products/services,  leave,  and  reduce  wallet-­‐share).  Objective  measures  of  customer  loyalty  provide  a  backwards  look  into  customer  loyalty  levels  (e.g.,  defection  rates,  number  of  new  customers,  and  sales).  Customer  surveys,  however,  allow  companies  to  examine  customer  loyalty  in  real-­‐time.  Surveys  solicit  questions  regarding  expected  levels  of  loyalty-­‐related  behavior  and  provide  opportunities  for  companies  to  “look  into  the  future”  regarding  customer  loyalty.  Based  on  customers’  ratings  of  their  own  likely  future  behaviors,  Hayes  (2008,  2009)  found  that  these  seemingly  distinct  customer  loyalty  behaviors  can  be  grouped  into  three  general  categories  of  loyalty  behaviors:  • Retention:  leave,  reduce  wallet-­‐share  • Advocacy:  overall  sat,  choose  again  for  first  time,  recommend,  purchase  same  again  • Purchasing:  purchase  more  often,  purchase  different  products/services  The  corresponding  behaviors  for  these  three  components  were  used  to  create  customer  loyalty  indices  that  can  be  used  in  customer  surveys:  • Retention  Loyalty  Index  (RLI):  Degree  to  which  customers  will  remain  as  customers  or  not  leave  to  competitors  • Advocacy  Loyalty  Index  (ALI):  Degree  to  which  customers  feel  positively  toward/will  advocate  your  product/service/brand  • Purchasing  Loyalty  Index  (PLI):  Degree  to  which  customers  will  increase  their  purchasing  behavior  Hayes  (2009)  found  that  these  three  loyalty  indices  were  reliable,  valid  and  useful;  each  index  has  excellent  reliability  (low  measurement  error)  and  is  predictive  of  important  business  outcomes.  Additionally,  he  found  that  all  three  components  of  loyalty  are  useful  for  understanding  customer  relationships  that  drive  business  growth  in  different  ways.  In  a  study  asking  over  1000  customers  about  their  current  network  operator,  Hayes  (2008)  found  that  these  loyalty  indices  were  predictive  of  business  metrics  across  several  US  network  operators  (Alltel,  AT&T,  Sprint/Nextel,  T-­‐Mobile,  and  Verizon).  As  expected,  the  RLI  was  the  best  predictor  of  future  churn  rate;  the  ALI  was  a  good  predictor  of  new  customer  growth;  finally,  the  PLI  was  the  best  predictor  of  Average  Revenue  per  User  (ARPU)  growth.  Because  each  loyalty  index  provided  unique  information  regarding  the  growth  of  the  companies,  companies  can  use  these  three  indices  to  fully  understand  their  customer  relationships  to  grow  their  company  through  new  and  existing  customers.    
    • 24  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayCustomer  Lifetime  Value  Customer  lifetime  value  (CLV)  reflects  the  present  total  value  of  a  customer  to  the  company  over  his  or  her  lifetime.    Customer  loyalty  and  customer  lifetime  value  (CLV)  are  interrelated.  As  see  in  Figure  21  below,  three  components  of  customer  loyalty  each  contributes  to  CLV.  Figure 22. Customer Loyalty and Customer Lifetime Value  In  fact,  the  calculation  of  CLV  is  based  on  understanding  the  three  components  of  customer  loyalty:  • CL:  Average  customer  life  (in  years)  -­‐  RETENTION  • NC:  Number  of  customers  -­‐  ADVOCACY  • NP:  Number  of  times  the  average  customer  make  a  purchase  each  year  -­‐  PURCHASING  • PPS:  Average  profit  per  sale  (total  sales  revenue  –  costs)/number  of  sales  While  there  other  elements  that  are  included  in  the  calculation  of  the  customer  lifetime  value  that  are  not  presented  here  (e.g.,  future  value  of  the  dollar,  and  risk  factors),  these  four  elements  are  the  core  at  understanding  how  customer  loyalty  and  customer  value  are  related  to  each  other.  Using  these  elements,  we  can  calculate  the  customer  lifetime  value  for  the  entire  customer  base  (or  customer  segment):  CLV  =  CL  x  NC  x  NP  x  PPS  With  the  creation  of  the  Retention  Loyalty,  Advocacy  Loyalty  and  Purchasing  Loyalty  Indices,  companies  can  now  use  customer  surveys  to  understand  each  customer  component  as  they  relate  to  customer  lifetime  value.  Using  these  loyalty  indices,  we  can  calculate  the  RAPID  Loyalty  Growth  Score  which  measures  the  health  of  the  customer  relationship:  RAPID  Loyalty  Growth  Score  =  (RLI  +  ALI  +  PLI)/3  The  RAPID  Loyalty  Growth  Score  reflects  the  general  health  of  the  customer  relationship  and  the  future  levels  of  growth.  Because  RAPID  scores  indicate  better  health  of  the  customer  relationship,  companies  with  higher  RAPID  scores  are  predicted  to  experience  accelerated  levels  of  business  growth.    
    • 25  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayReferences  Hayes,  B.  E.  (2009).  Beyond  the  ultimate  question:  A  systematic  approach  to  improve  customer  loyalty.  Quality  Press.  Milwaukee,  WI.  Hayes,  B.  E.  (2008).  Measuring  customer  satisfaction  and  loyalty:  Survey  design,  use  and  statistical  analysis  methods  (3rd  ed.).  Quality  Press.  Milwaukee,  WI.  Hayes,  B.  E.  (2008).  Customer  loyalty  2.0:  The  Net  Promoter  Score  debate  and  the  meaning  of  customer  loyalty,  Quirk’s  Marketing  Research  Review,  October,  54-­‐62.  Hayes,  B.  E.  (2008).  The  true  test  of  loyalty.  Quality  Progress.  June,  20-­‐26.          
    • 26  |  P a g e  Copyright © 2010 Mob4Hire and Business Over BroadwayWho  we  are  About  Business  Over  Broadway  Business  Over  Broadway  (BOB;  www.businessoverbroadway.com)  provides  consultative  services  to  help  companies  gain  superior  customer  insight  through  customer  satisfaction  and  loyalty  research.  Customer  insights  help  business  professionals  make  better-­‐informed  decisions  to  improve  customer  satisfaction  and  ensure  long-­‐term  customer  loyalty  and  financial  success.    Business  Over  Broadway  is  Bob  E.  Hayes,  Ph.D.,  a  recognized  expert  in  customer  satisfaction  and  loyalty  measurement,  and  author  of  the  best-­‐selling  books,  Beyond  the  Ultimate  Question,  and  Measuring  Customer  Satisfaction  and  Loyalty.  Dr.  Hayes  has  conducted  survey  research  for  Oracle,  Sophos,  Siebel  Systems,  Agilent  Technologies,  and  Cisco  Systems.  For  more  information  about  Business  Over  Broadway,  please  surf  to  www.businessoverbroadway.com,  or  contact  us  at  info@businessoverbroadway.com.    About  Mob4Hire  With  45,000  mobile  users  on  over  350  operators  in  150  countries  worldwide,  Mob4Hire  (www.mob4hire.com)  is  the  largest  real  world;  crowd  sourced  testing  and  market  research  community  for  mobile  apps.  By  incorporating  user  feedback  and  in  market  testing  to  developers,  we  help  make  mobile  apps  and  websites  better.  Mob4Hire  significantly  reduces  mobile  application  testing  costs  and  reduces  time  to  market  by  connecting  developers  with  eager,  lower  priced,  crowd  sourced  testers  and  focus  groups.  Mob4Hire  also  provides  their  unique  micro-­‐payment  crowd-­‐sourced  MAAP  technology  (Mob4Hire  as  a  Platform)  to  developer  networks  and  app  stores  such  as  O2  Litmus  to  allow  for  private  labeled  communities  to  be  added  to  Carrier  and  Handset  Manufacturer  enterprise  systems.  Founded  in  2007,  Mob4Hire  is  headquartered  in  Calgary,  Alberta,  Canada  with  offices  in  Victoria,  British  Columbia  and  London,  U.K.