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Poor Customer Experience Causes 24% of Pay-TV Churn – PaywizardWhile content selection is still crucial, consumers are increasingly basing their pay-TV subscription decisions on their customer experience. Other factors such as "brand reputation, flexibility, attention to customer preferences, understanding of subscriber needs and circumstances, and the overall customer experience" are as important as content choices, according to a recent online survey of 6,242 consumers across six countries (Australia, Brazil, Germany, Singapore, the UK and the US) conducted by billing and CRM vendor Paywizard. According to the study, 24% of respondents ended their pay-TV subscription in the past 12 months because the "service, support and overall customer experience were very poor." There were some variances among the respondent base, with 36% of respondents doing so in Brazil, but only 17% in Germany. One interpretation of this data could be that Germany has very high customer service, but in fact Germans just seem to value it less. While 84% of all respondents said they would cancel their subscription if "support became poor and the company seemed out of touch with their needs and preferences," this only held true for 60% of Germans. There were also some interesting differences among age groups, with younger consumers more sensitive to their customer experience. Forty-six percent of all consumers stayed with their provider when they "might otherwise have terminated" the service, only because of a positive customer experience. Within the 18-24 age group this rose to 57%, and stayed exactly the same for 25- to 31-year-olds. But for the 55+ demographic, this fell to 32%. It would seem from this data that younger consumers are more particular about their customer experience, and value it higher than those above 31 years of age. This generally lines up with millennial behavioral profiles in the 18-34 range, from other studies. Paywizard has also conducted focus group interviews in the US and UK previously, and found that poor customer experiences fell largely into the following categories:
Flexibility emerged as a major theme in those interviews, with customers highlighting their need to have multiple user profiles and be able to watch multiple streams within the same household. Discounts and recommendations were other important attributes of a good service, according to subscribers. But perhaps most important is the ability to join and leave services quickly, simply and easily. The challenge for pay-TV providers is that customers, particularly younger customers, are determined to have this flexibility. As such, annual contracts and lengthy service set-ups are a significant reason for not signing up for Pay-TV. However, easy-in also means easy-out, which is partly why OTT providers are facing such high churn -- something that a previous Paywizard study highlighted. (See High Churn Threatens OTT Growth – Paywizard.) Unfortunately there is little choice for operators in this area. At least for video services aimed at millennials, it seems they have to offer easy take-up and cancellation. They must also make it easy to add or drop premium elements of their package, allow access to third-party providers and enable their services on a variety of devices, for use by multiple household users. According to this study, 71% of respondents said that while good content is important in choosing new video services, "other factors such as brand reputation, word of mouth recommendations, positive online comments on service and the overall customer experience" were as important in convincing them to sign up. And 78% said that while content was important, factors such as "brand reputation, flexibility, attention to customer preferences, understanding of their needs and the overall subscriber experience" were equally important in convincing them to stay with a current provider. The actual decision to subscribe to a service is dependent on a number of factors, not least of which are availability of services and broadband connections. It's also true that good customer service has always been a requirement for any service provider of any kind. What this study highlights is that younger consumers in particular place a higher value on customer experience than previous generations, but equally important that they may be defining it somewhat differently. For them, it's about flexibility and personalization rather than just uptime and high video quality. Those attributes are not unimportant, but perhaps no longer a differentiator. Now it's about as frictionless an experience as possible signing up for, managing and -- if they want -- leaving a service. That's the area operators should be thinking about improving for their skinny bundles and other streaming services. — Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation |
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On-the-Air Thursdays Digital Audio
ARCHIVED | December 7, 2017, 12pm EST
Orange has been one of the leading proponents of SDN and NFV. In this Telco Transformation radio show, Orange's John Isch provides some perspective on his company's NFV/SDN journey.
Special Huawei Video
Huawei Network Transformation Seminar The adoption of virtualization technology and cloud architectures by telecom network operators is now well underway but there is still a long way to go before the transition to an era of Network Functions Cloudification (NFC) is complete. |
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