SA cellular networks increasingly undifferentiated when it comes to customer satisfaction
The South African cellular network industry has improved in the customer satisfaction stakes according to the latest South African Customer Satisfaction Index (SA-csi) for Mobile Telecommunications Services, conducted by Consulta.
SA’s three largest cellular networks, Cell C, MTN and Vodacom, have all recorded improvements in satisfaction since the 2018 measures, however long-terms trends indicate a degree of inconsistency when it comes to keeping their customers happy. One pertinent finding is that customer expectations have consistently declined over a four-year period. This is cause for concern as declines in customer expectations have been proven to foreshadow inevitable drops in perceived quality, value and ultimately overall satisfaction.
The 2019 SA-csi for Mobile Telecommunications Services surveyed just over 2500 customers across pre-paid, top-up and post-paid (contract) customers who make use of the collective product offering of voice and data solutions. The survey was conducted during the second half of 2019.
“An overt focus on competing with each other on price and network coverage has come at the expense of customer satisfaction and loyalty, leaving the industry vulnerable to new entrants, substitutes and brand switching as consumers are increasingly looking for alternatives. The index shows that customers perceive South Africa’s cellular rivals as homogenous, with brands offering very little differentiation for customers to compare offerings, other than price,” explains Ineke Prinsloo, Head of Customer Insights at Consulta.
The industry’s customer expectations score has declined to its lowest point since the inception of the study seven years ago. This speaks to the fact that customers expect less due to the disappointment they have experienced in their dealings with their providers. It is notable that no leader is identified in the 2019 index, with all providers coming in either on or below industry par. Across all industry sectors covered by the SA-csi, the performance of the cellular network providers on customer satisfaction is second lowest, coming in ahead only of medical schemes.
“Results indicate that networks included in the measure are struggling to differentiate themselves on unique, customer-centric needs and offerings, instead preferring to compete directly with each other by seemingly targeting identical markets and segments.
This battle is especially damaging to Cell C which continues to trail behind Vodacom and MTN on customer satisfaction. It is difficult to see how Cell C will escape its current troubles without clearly understanding and appealing to a more niche portion of the market. The financial services sector provides an excellent case study on how successful a narrow, focused approach can be if one looks at how successful brands such as Capitec (in banking) and Virseker (in insurance) have been,” adds Ineke.
Mobile data continues to remain a contentious issue with customers frequently complaining about their respective network’s data network quality and giving particularly low perceived value ratings (less than 70 for each network). This, coupled with a lack of differentiation, gives new players an opportunity to make inroads and attract customers who are looking for a more customer-centric offering that is better suited to their unique needs. While Vodacom and MTN remain at the forefront in the premium segment for now, the latest index shows increasing erosion of this position as customers become less concerned with the quality of voice networks, placing more emphasis on mobile data offerings and services.
“The index surveyed both pre-paid and contract (post-paid) customers, and it is concerning to note that across the board, contract customers are the most dissatisfied and have the most complaints. This suggests that these customers are given the least attention in terms of value, quality of products and relationship with their provider. This should be a red flag, given that contract clients are what we view as ‘bankable’ business for network operators. Once tied into a contract, it seems that there is a distinct level of neglect that creeps into the customer experience and service for these customers. It is a dangerous position to be in as these customers feel like hostages as they are unable to move their business or get their complaints resolved, so they will be the first to move their business when they can, and in their wake will do immeasurable damage to the brand reputation in terms of negative word of mouth,” explains Ineke.