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Wednesday, January 27, 2010

Customer loyalty, tolerance and contempt

It continually amazes me how much self-delusion I hear from operators and their vendors on the topic of "customer loyalty". Many seem to confuse inertia (ie people being too lazy to switch) with loyalty. Or they confuse services which they describe as "sticky" (ie which have inherent user lock-in) as having the potential for creating loyalty.

They should have a look in a dictionary: "A feeling or attitude of devoted attachment and affection"

This fits rather uneasily with the reality of customers being treated with contempt over things like ludicrous data roaming fees, or (if the hype is to be believed) future attempts at extortion by non-portable network-resident address books.

Roaming fees are a particularly good example: do you really, really expect your customers to respect you and "be loyal" ("feel affection") when they are so clearly and evidently ripped off, often by factors of 100 or 1000 over reasonable prices? The two concepts - contempt and loyalty - are mutually-incompatible, and yet somehow marketing and pricing executives seem happy to overlook the link between the two.

I know very few customers who are truly "loyal" - in the sense that the extol the virtues of a given operator to friends, much less who would self-describe as "devoted" in the same fashion as a footbal fan or an Apple acolyte. Most are, at best, "tolerant" of their provider.

1 comment:

Curt Carmack said...

Couldn't agree more. It never fails to amaze me how deluded some of these folks are. In the U.S., for example, they seem to have no clue that attrition to pre-paid and second tier players is going to decimate them soon if they don't move on pricing more aggressively. The fact that everyone's now on a 2-year contract allows many operators to think wishfully that they'll just roll over into new contracts for the low, low price of a phone subsidy. I believe that for the first time in the U.S. wireless market, a significant percentage will not roll over but will go to MetroPCS, Boost Mobile, PagePlus, Cricket, etc. The only major that is remotely competitive is T-Mobile, with Sprint being slightly competitive if you factor in quality of data network. No matter how you slice it, interesting times ahead!