Timo Ahomäki is Chief Technical Officer of Technotree, who recently commissioned research into mobile operators and customers worldwide on their views towards loyalty. Timo gives us an overview of the research findings and what they mean for mobile operators.

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Timo, firstly tell us what Technotree’s interest was in conducting this research?

Technotree are a company who are very much involved in the business of support systems of the operators and one of our main targets this year and going forward is to look at customer life cycle management so what does it mean to manage really the life cycle, the revenue cycle of the consumer beyond just doing offers beyond doing campaigns and beyond just doing simple customer care. So the approach with this research was really to look at what is it that drives the customer experience and what is it that drives the loyalty of the consumers towards their operators. Then assess how that could be incorporated into our solutions and offerings.

A simple point of view might suggest that loyalty is down purely to cost, is it as simple as that or is it more complex?

I think there is a little bit more to it. Cost is an important factor obviously but I think with most markets globally today moving from a growth of subscriber base to more trying to maintain and them milking more revenue out of that base I think the cost has to be balanced with the opportunities that are out there in the market. These opportunities naturally are very different in different markets because of market maturity and spending levels of the consumers.

Looking at the actual customer behaviour stats that you have identified then, what is the average lifespan of a customer and does it vary across markets?

We found that customers globally view themselves as surprisingly loyal but the funny thing is that we know that in certain countries such as Kenya or Nigeria in Africa journey is a very big problem for the operators. The average lifetime of a customer from a customer prospective seems to be very long. I think that the crux is that there is a perception difference first of all but over all what we have found is that if we take the point of view that if a loyal customer stays with the operator for more than 2 years (renewing their contract at least once) we can see that a significant amount of customers globally actually exceed that.

Were there any surprises that you weren’t expecting to find as part of this research?

One of the surprising aspects we found in this research was that the perception between how the consumers themselves viewed their loyalty and what the reality or what the operators viewed is slightly different. Consumers view themselves as more loyal than they actually are. There could be many factors behind this one could be that in many countries consumers hold the same cards as some multiple operators so they are actually loyal to more than one operator. The other interesting angle we found was that gadgets do actually play a big role. For example consumers are actually looking forward to upgrading their devices and receiving an upgrade device offer from their operators, whereas the operators themselves may be do not view the device upgrade as such an important factor in loyalty.

Why should, from an operators point is customer loyalty important and are there any benefits to the customers in remaining loyal? 

Loyalty is a very complicated thing because there is reality and there is perception.  I think from an operators view the traditional way to look at loyalty is to I guess to avoid customer acquisition cost , or one of the reasons to look at loyalty is to avoid acquiring those customers over and over again and that is a cost factor. The other factor is that we can clearly see that customers who stay with their operator for longer tend to spend more money with those operators so they acquire a portfolio of services that produces more and more money for the operator. From an operators point of view naturally it makes a lot of sense to invest in customer loyalty and keeping those customers. From a customer’s point of view I don’t know what the real need to stay loyal would be beyond familiarity and beyond getting a broader set of services a broader bundle of services from  a single source.

What would you suggest that the mobile operator industry as a whole learn from your findings?

One of the key findings that would be useful for the industry as a whole would be to look a little bit beyond the traditional view to loyalty so to look into not just the set of services to look at, not just the pricing and competitiveness of the pricing but also the usage pattern or the pattern that the consumers behave in when they change. Like the device upgrades that consumers viewed as highly desirable would that be something that the industry could look at and see if we can use that proactively to drive loyalty instead of may be adding more services, adding more to the portfolio which were not always necessarily that well perceived by the consumers.

So it’s a case of flexibility rather than adding more and more products to keep consumers engaged with operators then?

Flexibility is very important and I guess offering products and services and just adding more stuff into an already big portfolio will not necessarily bring in the results but it would be better to try and make it cleverer and package the value in a way that the consumer can immediately see as beneficial for them.

What has Technotree been doing to support service providers in light of this research?

We are currently rolling out a set of products to our customer base that enables them to more intelligently target offerings for example. Use the information they have from their customers to find combinations of products that would be compelling to their customers not only from the point of view of loyalty but also from the point of view of finding up sell opportunities that are not intrusive from the consumer point of view. This research basically supports our thinking on how service bundles work in the market across the different geography’s and across the different types of operators.