SA’s mobile operators must do more to up their game in customer service instead of simply trying to outdo each other on price, says Vitorrio Massone, managing partner in SA at management consulting firm Bain & Company.

In the past year, the operators have slashed their mobile data prices in the hope of attracting new customers as the market begins to reach maturity. But Massone believes they could be doing more to retain their existing customers by improving the service experience.

“What’s happened in the past year is they have kept competing more on price than anything else, especially the new entrants,” Massone says.

The entry of Telkom’s mobile arm, 8ta, into the market, coupled with a reinvigorated Cell C, has shaken up the market in the past year, with operators undercutting one another on price, especially in broadband.

“The operators have been focused on attracting the most number of new customers as fast as possible, but the game is now about retaining customers and selling them more services. This is a completely different game and requires a different way of competing.”

Now, rather than chasing new customers, SA’s operators must understand how to create “happy customers” who will promote their brands — Massone calls them “promoters” — and win over clients from rival networks. “Growth now needs to be based on loyalty economics.”

Massone says promoters help operators attract other customers through positive referrals and typically spend 20% more than other customers. Also, they’re much less likely to move to other networks. Companies need to understand what keeps these customers loyal and what creates “detractors” and improve their customer touch points to turn more subscribers into promoters.

“You need to understand what in those touch points can create a promoter and what can create a detractor,” he says. “There’s a need to focus on creating a consistent performance at the most important customer touch points. It’s a pervasive exercise and has to become something that is done at the CEO level, if not the board level, and must become part of the mission and strategy of the company.”

The challenge for operators, Massone says, is that customer-facing employees are often not sufficiently empowered or trained because they are too far from where power rests and where decisions are made.

“The key step is empowering these people,” he says. He suggests operators could call back customers within 24 hours of an interaction at a key touch point, asking them to score the quality of the interaction to create an objective measure of what’s happening in the company’s branches and call centres. Then, he says, offer to have the employee who dealt with the customer call them for further feedback.

“You empower the front end so these employees begin to understand the impact they have on clients,” Massone says. “From this feedback from clients, [employees] will learn enormously.”

He adds that it’s also important for operators to identify their best customers and focus extra attention on them. “If you are able to understand what clients want, and offer them a differentiated service, then you can prevent yourself from competing only on price.”

Customers will often look for the reassurance of the brand and the quality of support and service on offer and won’t always go for the cheapest option.

However, operators must also reduce their costs as competition intensifies and prices fall, Massone says.

Networks can define who and where their most important customers are and plan differentiated coverage that helps them to manage their capital expenditure better. Operators must also focus on extracting more productivity from their field staff as a way of improving efficiencies and reducing costs. — Duncan McLeod, TechCentral