ericsson consumer lab identifies what consumers really want from their operators

OPTIMAL CONSUMER EXPERIENCEAn analysis of how operators can maintain and improve customer satisfaction

An Ericsson Consumer Insight Summary Report February 2012

consumerlab

contents

Ericsson ConsumerLab has conducted research that identifies what really drives the consumer experience when using communication services. This research also shows what needs to be implemented to further enhance this experience.

In order to fully understand what makes the consumer experience dynamic, Ericsson ConsumerLab has released a set of unique results that measure consumer satisfaction and importance. These identify the improvements that operators can undertake in order to optimize the experience.

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 Russian and Brazilian markets.

Ericsson ConsumerLab is a knowledge-based organization that provides consumer insight to influence strategy, marketing and product management within the Ericsson Group. Ericsson ConsumerLab has more than 15 years’ experience in consumer values and behavior research, including the way people act and think about ICT products and services. This insight helps operators to develop attractive revenue-generating services.

Knowledge is gathered through a global research program which interviews 100,000 individuals in more than 40 countries and 10 megacities annually – 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.

To be close to the market and consumers, Ericsson ConsumerLab has team members working in most of Ericsson’s market regions. Being part of the Ericsson Group gives the organization a thorough understanding of the ICT market and business models. This broad knowledge is unique and is the basis for Ericsson’s credibility and integrity. Ericsson ConsumerLab is able to share the big picture, with an understanding of where the individual fits in and what this means for future trends and services.

www.ericsson.com/consumerlab

ericsson consumerlab – the voice of the consumer

2 CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE

Enhancing the consumer experience 3

Focus on the US market 4

Satisfaction vs importance 5

Combining satisfaction and importance 6

Optimizing the consumer experience 7

Meeting tomorrow’s needs 9

Highlights from Brazil and Russia 10

Enhancing the consumer experience

CONSUMERLAB OPTIMAL CONSUMER EXPERIENCE 3

Today, operators compete in a very different market to the one they faced only a few years ago.

Consumers can choose from an abundance of brands, products and services when communicating, sharing, and socializing. Because of this, the market is increasingly driven by consumer needs and desires. People expect to be able to manage their service how they want, when they want and from any device.

In such a competitive market, operators need to adapt by rethinking the way they interact with consumers. This study looks beyond the key parameters of price and quality to get a thorough picture of what really matters for the consumer experience.

Ericsson ConsumerLab has conducted a study that uncovers consumer insights that operators can capitalize on in order to shape the future consumer experience. The results allow us to understand what represents an ideal consumer experience today and tomorrow for selected target groups of consumers.

> True picture Measuring satisfaction levels is not enough,

by combining this with what is important to users, we get a true picture of the optimal consumer experience.

> over half are satisfied 62% of subscribers are satisfied with their

operator. This level varies when asking the consumer how satisfied they are in a particular situation/interaction with their operator.

> 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.

> service and support most important Service and support has been measured as

having the highest impact on the relationship with an operator today. The key driver being a “service representative that is knowledgeable about the individual”.

> unmet needs There are still unmet needs that could

further improve the consumer experience. These include transparency, efficiency and proactivity.

The Key findings


focus on the us MARKETEricsson ConsumerLab met and spoke with 72 consumers from different demographic groups in Chicago and San Francisco to acquire an in-depth understanding of their experience when interacting with service providers.

This has enabled us to identify the main expectations and frustrations that consumers have with operators that are not meeting their needs.

There were recurring unmet needs voiced by consumers during the interviews. These included lack of transparency in billing, a generalized customer care approach and a lack of loyalty building.

For example, consumers have complained that while their service bills had increased over time, better rates were made available to new customers through promotions. Loyal customers are therefore penalized by being forced to pay full rates.

This latter disappointment is a reflection of consumer expectations which have been set by other industries, such as the travel and credit card market. These sectors regularly reward loyalty with better service or monetary incentives.

Based on feedback from the consumers, a list of 58 separate questions were identified that could be used in an online survey. We categorized the results into five different touch point areas: service and support, initial purchase process, billing and payment, account management and loyalty building.

Satisfaction was measured on three levels:

1. Overall satisfaction with the operator

2. For each touch point area

3. For each of the 58 questions

We observed that satisfaction levels decrease when asking the consumer how satisfied they are with a specific situation/interaction with the operator. The more specific the questions, the more varied the answers were regarding satisfaction. Overall, it was found that 62% of respondents were satisfied with their operator.

More than half of the consumers studied are satisfied with their operator; however satisfaction levels decline slightly as the consumer engagement process continues.

Rewarding consumer loyalty through personalized service and attention is the touch point area that consumers indicate needs the most enhancements.

We also observed that a large portion of consumers are indifferent, indicating that communication services are a low priority today. However, there is an opportunity to increase satisfaction for these consumers in the future.

Figure 1: Overall satisfaction levels for each of the touch point areas

CuStomER ExpECtAtIonS

In general, US consumers who have contacted their operator are less satisfied than those who have not. Those same consumers are also shown to have generally higher expectations of their operator.

Of those that had contacted their operator in the last 6 months, 61 percent had wanted to upgrade or downgrade their services, 58 percent were calling to resolve a technical issue and 51 percent were interested in information about new services or products. Some consumers may have contacted their operator more than once.

IndifferentCompletely satisfied Completely dissatisfied

0%

20%

40%

60%

80%

100%

Loyaltybuilding

Service& support

Accountmanagement

Billing& payment

Initialpurchase process


satisfaction vs importanceSimply measuring how satisfied consumers say they are with their experience does not give us a full understanding of which expectations are most important to optimizing the experience. Therefore we have added another dimension that measures the importance of each question.

The results show that service and support is the most important touch point area in the overall consumer experience today. Service and support is mostly driven by customer service representatives being knowledgeable about the individual. Initial purchase process is a close second.

Initial purchase process

Loyalty building

Billing & payment

Account management

Service & support

Identified in qualitative research to measure the

consumer experience

questionS

TOday

8%

Loyaltybuilding

49%

Service& support

13%

Billing& payment

2%

Accountmanagement

29%

Initial purchaseprocess

Figure 2: Importance levels of the five touch points

Different consumers – different needs

Different consumer profiles have different needs. All touch point areas are important for the overall consumer experience but the touch point areas that are the most important differ between segments.

The initial purchase process is driven by an individual’s ability to customize the service to meet their own specific needs. This is the most important area for more senior and less tech-savvy individuals. Billing and payment is of great importance to career-minded people. These groups of people are comfortable using technology as part of their everyday lives, and expect complete transparency regarding the financial aspect of their account.

Loyalty building and account management are especially important for young professionals, as most are in the process of establishing their lives and have started to pay for services themselves relatively recently.

Figure 3: Defining the touch point areas

Mor

e sa

tisfie

dLe

ss s

atis

fied

Less important More important

MAINTAIN

Prioritizede-prioritize

latentstrengths


combining satisfaction and importanceFigure 4: Combining satisfaction and importance

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.

OPtimizing the consumer experience

Operators already have many satisfaction drivers in place but there is still great potential for improvement across all touch point areas.

Figure 5: shows the main expectations that have been successfully met by operators.


Satisfaction drivers that have been successfully implemented

Customization give consumers the opportunity to personalize services to meet their specific individual needs

provide detailed information about each consumer to 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

24/7 customer support maintain 24/7 availability of customer support for trouble shooting

MAINTAIN

Implemented drivers of satisfaction that need to becontinuously maintained and enhanced

HIGH SATISFACTION, HIGH IMPORTANCE

Simplicity 24/7 customer support

Prioritize

Drivers of satisfaction for the futureconsumer experience

LOW SATISFACTION, HIGH IMPORTANCE

Transparency Efficiency

Proactivity Consumers in control

SpeedCustomization

Figure 5: Successfully met expectations

there’s always something you don’t really want, like with my operator I did not want my landline.”

parent San Francisco


OPtimizing the consumer experience

MAINTAIN

Implemented drivers of satisfaction that need to becontinuously maintained and enhanced

HIGH SATISFACTION, HIGH IMPORTANCE

Simplicity 24/7 customer support

Prioritize

Drivers of satisfaction for the futureconsumer experience

LOW SATISFACTION, HIGH IMPORTANCE

Transparency Efficiency

Proactivity Consumers in control

SpeedCustomization

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 need to be implemented in order to achieve the optimal consumer experience in the future.

Creating the optimal consumer experience

Transparency Avoid hidden clauses in contracts and other communications to the consumer

Efficiency Guarantee that a problem will be resolved within a specific time period, with penalties if not achieved

Proactivity 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

Figure 6: Drivers to be prioritized

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 Chicago


Today, loyalty building, account management, and billing and payment contribute less to the overall consumer experience than initial purchase process and service and support.

In addition to maintaining the satisfaction drivers that create a good consumer experience today, there is an opportunity in the future for operators to capitalize on consumer expectations that have not yet been fully met.

When analyzed in detail, these consumer expectations call for proactivity and transparency to provide consumers with a greater feeling of control over their account. They are classified within the loyalty, account management, billing and payment touch point areas.

These touch point areas currently contribute more to the consumer experience of young professionals and other tech-savvy consumer segments. We know from previous research that the usage patterns of such groups are an indication of the likely direction of future consumption patterns.

Meeting tomorrow’s needs


Brazil

Service and support is most important for the consumer experience in Brazil followed by account management and billing.

The Brazilian consumer experience is characterized by high levels of control over usage and spending. This is mainly due to the fact that the majority of users are on prepaid payment plans.

There is also high satisfaction with polite and friendly customer service representatives. However, a quicker response time is required to create the ideal consumer experience. A mandate to make immediate decisions would help customer service representatives to achieve this.

highlights from brazil and russia

19%

Billing& payment

47%

Service& support

1%

Loyaltybuilding

1%


32%

Accountmanagement

Figure 7: Importance levels of the five touch points in Brazil


Russia

The service and support touch point area is most important for the consumer experience in Russia, followed by billing and payment.

Russian consumers have high levels of control over their spending, due to the majority being on prepaid payment plans.

In the Russian market there is a marked frustration regarding the lack of warning about service outages. Operators can improve on this by providing advanced warning before service interruptions, and offer compensation for lost usage.

highlights from brazil and russia

Regional survey variations

Internet penetration is a lot higher in the US than in Brazil and Russia. The Russian and Brazilian respondents therefore represent the more tech-savvy proportion of their country’s population.

us> Sample is representative of approximately

100 million people

> 1,100 interviews

> Online population who own and use a mobile phone and subscribe to an internet service

brazil

> Sample is representative of approximately42 million people

> 900 interviews

> Daily to weekly internet and mobilephone users

russia

> Sample is representative of approximately25 million people

> 900 interviews

> Daily internet users, highly educated, mobile phone users

1%

Loyaltybuilding

4%

Accountmanagement

44%

Billing& payment

50%

Service& support

1%


Figure 8: Importance levels of the five touch points in Russia

Ericsson

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Telephone +46 10 719 00 00

Fax +46 8 18 40 85

www.ericsson.com

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© Ericsson AB 2012

Ericsson is the world’s leading provider of communications technology and services. We are enabling the Networked Society with efficient real-time solutions that allow us all to study, work and live our lives more freely, in sustainable societies around the world.

Our offering comprises services, software and infrastructure within Information and Communications Technology for telecom operators and other industries. Today more than 40 percent of the world’s mobile traffic goes through Ericsson networks and we support customers’ networks servicing more than 2 billion subscribers.

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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.

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