Suppose a market opportunity arises that your investment strategy demands and is too good to miss. The trouble is that in pursuing it your brand suffers in an attempt to deliver a quality of service that is difficult, if notimpossible, to meet due to over-promising from the start.
This is the challenge currently facing the mobile phone operators. Mobile broadband (attaching a dongle to your laptop to give you broadband on the move) was one of the reasons why operators paid £22.5bn for 3G licences a decade ago.
As the technology was increasingly marketed to consumers rather than businesses, the networks strained and creaked, and consumer dissatisfaction grew as promised speeds seldom materialised. The net effect has been that a generally satisfied customer base of mobile phone users now includes a largely dissatisfied mobile broadband customer group. Although this subset of customers is a small portion of the operators’ overall custom base, they are a vocal minority (take a look at some of the messageboards) and a segment that is growing.
YouGov’s DongleTrack service has monitored the decline in satisfaction and renewal rates that happened over the last two years as the mobile operators failed to deliver on the speeds promised in the marketing messaging. Satisfaction levels for the category are almost 10% down over a 15-month period. Those companies that over-promised the most and had the biggest “expectation gap” saw some of the worst metrics – a message for marketers everywhere.
The issues these companies (and indeed all of those who are using mobile broadband as a marketing or distribution channel) need to understand include:
- What will be the longterm effect of this breakdown in trust that some customers experience?
- To what extent are the messages used to win new custom directly responsible for the dissatisfaction that has been experienced?
- Are people moving to other channels as a result?
- What does an operator need to do in order to reduce their churn levels in the face of a deteriorating network infrastructure?
The next generation of mobile communications (be that 4G or LTE) is just around the corner. Mobile operators need to learn their lesson from 3G, avoid making unrealistic promises of “up to” speeds and concentrate on managing their network planning so that brand value is maintained alongside revenues.