Consumer Survey United States

© 2012 IBM Corporation

Communications spending priorities, perceptions, expectations and attitudes of today’s smarter consumer

2011 Global Telecom Consumer Survey Country Data for United States

IBM Institute for Business Value

February 2012


The digital revolution is changing the relationship between Communications Service Providers (CSPs) and their customers


2

Consumers become

increasingly instrumented The are using technology to get

information from a multitude of sources

Consumers become

increasingly interconnected They are connecting with each other to

exchange information

Consumers become

increasingly intelligent They have clearly defined expectations

of what they want


Consumers are becoming smarter and have new avenues to connect with each other to influence large corporations, including CSPs

12/29/11 Press Release: “Starting January 15, a new $2 payment

convenience fee will be instituted for

customers who make single bill

payments online or by telephone”

Greetings,

I am disappointed to learn that Verizon Wireless

plans to institute a new $2 fee for paying bills

online…. Your company should not assume that

it can do anything to your customers and that we

will allow it to happen…

Within 24 hours, more

than 100,000 people had

signed a online petition:

12/30/11 Press Release:

“Verizon Wireless has decided it will not institute the

fee for online or telephone single payments that was

announced earlier this week.

The company made the decision in response to

customer feedback about the plan…”


3


To evaluate the impact of the age of consumerism the IBM Institute for Business Value conducted both a Consumer ánd a CMO survey

4

IBM Global Consumer Survey

(25 countries;13,237 consumers)

IBM Global CMO Survey

(131 interviews with telecom CMOs)


© 2012 IBM Corporation 5

CSP CMOs indicated they feel underprepared particularly in areas that are key for connecting to customers, identified as most critical for them

Source: Q7 Which of the following market factors will have the most impact on your marketing organization over the next 3 to 5 years? n1=131 Q8 How prepared

are you to manage the impact of the top 5 market factors that will have the most impact on your marketing organization over the next 3 to 5 years?

Global outsourcing

Decreasing brand loyalty

Customer collaboration and influence

Growth of channel and device choices

Data explosion

Regulatory considerations

ROI accountability

Privacy considerations

Corporate transparency

Shifting consumer demographics

Social media

Financial constraints

Emerging market opportunities

Mean

5

6

7

8

9

10

11

12

13

1

2

3

4

11

50

60

70

40

20 40 60 0

Global Marketing Priority Matrix

Factors impacting

marketing Percent of CMOs selecting

as ‘Top five factors’

Underpreparedness Percent of CMOs reporting

underpreparedness

8 7

11 12

6

3

7

6

1

2 4

5

10 9

Telecom (CSPs)


5


To understand consumers’ attitudes towards CSPs in the world of today IBM conducted a survey of over 13,000 consumers in 25 countries

6

Mature

France UK US

Greece Italy Japan

South Korea Australia Portugal

Netherlands Sweden Spain

Belgium Germany Canada

Emerging

Brazil

Mexico

Poland Czech Republic

India China

UAE

Russia

South Africa

B R I C

Cyprus



The survey covered many topics, including spending priorities, service adoption trends, customer advocacy and adjacent market opportunities

7

Customer Spending

priorities for 2011 –

2013

Customers’ Adoption of,

Experience with, comms

products and services

Customer Sources of

Information for communi-

cation products/ services

Customers’ Attitudes

towards Comms Providers Customer Advocacy

and Antagonism

Adjacent Market

Opportunities



More than 100 slides describe the characteristics of US consumers in their perception of CSPs and their products and services

Customer Spending

priorities for 2011 –

2013

Customers’ Adoption of,

Experience with, comms

products and services

Customer Sources of

Information for communi-

cation products/ services

Customers’ Attitudes

towards Comms Providers Customer Advocacy

and Antagonism

Adjacent Market

Opportunities



1241 respondents were drawn from across the US and subscribe to at least one service from a wide range of service providers

Mobile/Wireless Broadband

Pay TV (Cable, Satellite, IPTV)

Internet Telephony

Fixed telephony (landline)

Mobile Telephony

Fixed Broadband (Cable, DSL, FTTx)-

*Services are

31 % 29 %

8 % 7 %

7 % 6 %

4 % 3 %

2 % 2 %

1 % 1 %

Proportion of sample identifying one of the providers

below as their Primary Communications Provider US : 1241

respondents; 12.2% of

total sample (weighted

distribution 22.4%)


Some Results


© 2012 IBM Corporation 11 11

44%40%38%31%

25%25%22%20%16%

-4%-5%-7%-8%-8%-9%-9%-12%-17%-18%-19%-22%

-29%-30%

-56%

1%

Sw

ed

en

UK

Gre

ece

Ita

ly

Po

rtu

ga

l

Fra

nce

Ne

the

rla

nd

s

Spain

Belg

ium

Ge

rma

ny

Au

str

alia

US

A

Ja

pa

n

Ca

na

da

.

Cyp

rus

Czech R

.

Pola

nd

Ru

ssia

Ind

ia

Ch

ina

Bra

zil

UA

E

Me

xic

o

So

uth

Afr

ica

Kore

a

45%

35%31%

15%15%12%8%6%5%

-3%-6%-6%-7%-7%-9%-10%-12%-13%-15%-16%-20%

-25%-32%

-43%

-2%S

we

de

n

UK

Gre

ece

Ita

ly

Po

rtu

ga

l

Fra

nce

Neth

erlands

Spain

Cze

ch

R.

Belg

ium

Ge

rma

ny

Au

str

alia

US

A

Ja

pa

n

Ca

na

da

.

Cyp

rus

Pola

nd

Ru

ssia

Ind

ia

Ch

ina

Bra

zil

UA

E

Me

xic

o

So

uth

Afr

ica

Kore

a

Emerging

Markets

Spending MOBILE Telephony (Voice, SMS, etc) (2012 – 2014)

Spending MOBILE Broadband (2012 – 2014)

As in most mature markets, more than less consumers in the US expect to reduce spending on mobile telephony and broadband

Net

Incre

ase

/Decre

ase

N

et

Incre

ase

/Decre

ase

Source: 2011 IBM Global Telecom Consumer Survey, Global N= 13237; Mature Countries N=8865; Emerging Countries N=4372

© 2012 IBM Corporation Source: 2011 IBM Global Telecom Consumer Survey, US N=1241 S06 How often do you use the following communications services?

Mobile Telephony

Email/IM/Chat

Social Networking

VoIP

Video Streaming

Fixed Voice

73%

80%

65%

46%

15%

31%

Daily

Usage

ABOVE 25s

Mobile Telephony

Email/IM/Chat

Social Networking

VoIP

Video Streaming

Fixed Voice

72%

65%

41%

47%

7%

19%

UNDER 25s

1

2

5

3

4

6

2

1

4

5

3

6

65% of under 25s use

social networks daily

46% of under 25s with

Internet stream or

download video daily

12

US consumers are increasingly using over-the-top internet communication services



46% 45% 48% 43% 48% 44%49%

44%

18% 17%18%

17%18%

18%

20%20%

14% 15%13%

16%12%

14%

11%

12%

4% 6% 5%6% 6% 6%

5%7%

8%7% 8% 8%

7%

4% 4% 3% 3%

7% 7%

6%6% 6% 7%7%6%4%

2%2%4%4%

0%

20%

40%

60%

80%

100%

Online

audio

content

Live video

broadcast

User

generated

video

Online

Music

video clips

Online

News

video clips

Online

sports

videos

TV

Programs

Full movie

Other smart phone

Android device

Blackberry

Tablet PC

iPhone

Laptop/Netbook via

Mobile Broadband

Via Fixed

Broadband

Q08. Which of the following do you use to access the media/content services

in the last question

High

Media/Content

users

About half of the consumers access rich content/media services on a daily basis, claim to do that via mobile devices

Source: 2011 IBM Global Telecom Consumer Survey, USA N=1241

Fixed


29% 31% 33% 33%37% 39% 39% 40% 41% 43% 44% 46%

50% 52% 52% 53% 55% 56%62% 65% 65% 67% 69%

75%

71% 69% 67% 67%63% 61% 61% 60% 59% 57% 56% 54%

50% 48% 48% 47% 45% 44%38% 35% 35% 33% 31%

25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

US

A

UK

Austr

alia

Neth

erlands

Sw

eden

Canada

Japan

Pola

nd

Germ

any

Port

ugal

South

Afr

ica

Spain

Czech

Belg

ium

Kore

a

Fra

nce

Mexic

o

Russia

Italy

Chin

a

Gre

ece

UA

E

Bra

zil

India

No

Yes

14

Do you ever complain to your service provider when you are disconnected

from the network during a conversation, a voice call or internet session?

Almost three-fourth of American consumers do NOT complain to their CSP when disconnected from the network



One third of consumers find it too much hassle to get through to the call center, another 1/3 don’t believe it make any difference

11%

32% 33%

13%

1% 3%7%

0%

10%

20%

30%

40%

Telco

networks

unreliable,

variable

service

expected

Don't believe it

make any

difference

Too much

hassle to get

through to the

Call Centre

Have to wait

too long in

queue to

speak to Call

Centre

My Provider

charge for

calls to Call

Centre

My Provider is

unable to

resolve my

problems

Don’t know

how to contact

my Provider to

complain

Q12 Why do you not complain to your service provider when you are disconnected from

the network during a conversation, a voice call or internet session?

Reasons for NOT complaining

13 % believe that it will take too long to

reach the call center



However, the majority of consumers exchange these experiences with their friends/family

47%

21%

5%

6%

45%

58%

60%

38%

27%

25%

8%

21%

28%

57%

67%

71%

12%

4%

Attempt to re-dial/re-connect

Avoid providers with whom friends/family had a

poor experience

Tell friends/family about my poor experience

Contact Customer Service

My Provider proactively contacts me in case of

poor network experience

Switch network providers - e.g. replacing SIM

Always Most/Sometimes Never

Q10. What happens when you are disconnected from a mobile, landline

or broadband during a voice call or when accessing the Internet?

92% Attempt Redial/

Reconnect

72% Tell friends/family

about their poor

experience

79% Avoid Providers with

poor experience

What happens when being disconnected?



53%

53%

32%

31%

28%

17%

11%

7%

56%

51%

17%

31%

24%

22%

13%

5%

Recommendations/ advice

Internet search

Social media

Websites of communication providers

Retail stores

Traditional advertising

Emails/ promotional offers

Shopping portals/ auctions

Under 25s

All Ages

What are you preferred sources of information when you are looking

for communication products and services?

Source: IBM Institute for Business value 2011 IBM Global Telecom Consumer Survey, USA N=1241

Question: What are you preferred sources of information when you are looking for communication products and services?

Family/Friends and Internet search - and for under 25s Social

Media - have become the preferred sources of information

17



CSPs should focus on this new trend and mine digital channels, such as blogs, tweets, social networks and peer reviews

Blogs

Tweets

Peer

Reviews

Social

Networks

• Get in tune with today’s digital consumers

by listening to the digital dialogue

• Become part of the dialogue and to be

prepared to proactively respond to

negative chatter

• Encourage a two-way dialogue and

embrace customer input by building online

and offline communities

• Find the influencers, and target them with

appropriate messaging

By capturing viewer insights from social media sources, RTL

Nederland was able to gather timely feedback from viewers

on the television programmes 'X Factor' and 'So You Think

You Can Dance'. This helped the entertainment company to

better understand audience needs and preferences and

increase viewer satisfaction and involvement.



Bharti Airtel understands how important it is to participate in the digital dialogue and how it can help solving problems

Source:http://www.buzzom.com/2011/07/airtel-adopts-social-media-strongly-customers-can-live-chat-in-facebook-and-orkut/

http://telecomtalk.info/airtel-impact-on-social-media/51645/

Having the official verified Twitter profile @Airtel_Presence,

they are scanning for every tweet which contains the word

“airtel” in it and giving appropriate replies to the customers and

solving the issues.

Airtel uses social network analysis to determine customers

facing problems. Any mention on social media is captured and

they get in touch with the customer to get the issue resolved.

“We take the business of customer satisfaction very

seriously.

Abhilasha

Hans,

CSO


19


In a world where people

• are becoming increasingly informed, empowered

and demanding

• trust family, friends and peers more than their CSP

• have a wide range of providers to choose from

how can CSPs

Improve Customer Binding?

• What does a true Advocate look like?

• How valuable are they?

• Which elements of the customer experience are

most important to consumers?

• How well is the CSP positioned when it comes to

being focused on what the customer wants?

• How can providers use Advocacy to drive growth

and customer loyalty?

Key Questions

To establish a stable or growing market share, or to improve margins, CSPs should focus on customer binding



A new approach for Customer Advocacy: Customer Focused Insight Quotient (CFiq)

The Net Promoter Score (NPS) is the traditional measure of word of mouth

advocacy. The score is calculated by simply asking consumers on a scale of 1 to

10 their likelihood to recommend a specific company or brand.

The IBM Customer Focused Insight Quotient (CFiq) utilize an approach that looks

at key client perceptions and organizes them in a manner that captures more than

demographic or behavioral data. Using statistical analysis and multiple regression

techniques it isolates predictive attributes that are highly correlated with positive

commercial behaviors. The CFiq measures the level of advocacy of a customer by

analyzing customer responses to three key statements as stated in the next slide.

CFiq categories: – Advocates: loyal clients who refer new business, consolidate more of their

portfolios with their primary provider, and resist competitive offers

– Antagonists harbor negative opinions about their provider, and potentially will

bad-mouth the company

– Apathetics: could be described as those who show no strong feelings either

way, and may be prime candidates to “sweeten” into advocacy. Or, they may

leave their firm if a more appealing option comes along.

NPS

CFiq


21


A consumers’attitude is shaped by cumulative experience and directs future behavior and suggestions for improvement

Likelihood to Recommend A willingness to recommend one’s

primary provider to friends and family

Purchase Intent

AND A willingness to increase one’s

purchases if one’s primary provider

expanded its assortment and offered

products currently found only at other

providers

Staying Rate

AND

A willingness to stay with one’s primary

provider, even if other providers begin

offering competitive products or services

An Advocate is defined by three criteria

Antagonists Apathetics Advocates

Consumer Attitude


© 2012 IBM Corporation 23 23

Understanding who is an Advocate and who an Antagonist, and why, is important for driving growth and improving customer retention

“I have recommended my provider to several people”

“They have amazing customer service”

“They are more expensive but I hardly get disconnected or have calls dropped”

“I think my telco over-charges me but how can I prove it; my credit runs out too quickly after I top-up”

“The promotions lack any relevance to me”

“ I am looking to switch to the new provider offering cheaper rates”

Antagonists

Advocates

Apathetics

Higher Shareholder

Value

Lower Shareholder

Value

Advocates have a higher

wallet share and are highly

complimentary of the

provider capability

Apathetics are generally

passive participants

susceptible to competitor

offerings

Antagonists have low

wallet share and high

support costs and are

prone to bad-mouth the

provider



US CSPs have too few advocates and too many antagonists, though a bit better than the global average

Antagonists

60%

Advocates

18% Apathetics

22%

39%

49%53% 52%

62% 61%

49%

59% 58%55%

58%

46%

57% 60%64%

70%

52%

62%69% 71%

77%

41%

25%

17%

21% 23%

14% 16%

29%

20% 23%26%

23%

36%

25% 22%19%

14%

31%

25%

22%25%

19%

56%

36% 34%

26% 25% 24% 23% 22% 20% 19% 20% 19% 19% 17% 17% 17% 17% 16%13%

9%4% 4% 3%

0%

20%

40%

60%

80%

100%

Sw

ed

en

So

uth

Afr

ica

Fra

nce

Ru

ssia

Me

xic

o

Sp

ain

Gre

ece

Be

lgiu

m

UK

US

Ne

the

rla

nd

s

Cze

ch

Re

pu

blic

Ita

ly

Po

lan

d

Po

rtu

ga

l

Bra

zil

Ge

rma

ny

Ca

na

da

Au

str

alia

So

uth

Ko

rea

Ja

pa

n

Ch

ina



24


Advocates % strongly agree % strongly agree Antagonists

Give the CSP

credit for

doing

“everything”

right

Find

fault

with

“everything

” CSP

does

Values me as a customer 28% 79%

Offers me relevant products and services 31% 80%

Displays consistent level of knowledge 33% 79%

Listens and collects information necessary to meet

communication needs

Prompt correction of errors when they occur

32%

34%

76%

76%

Does not request for existing information repeatedly 38%

Resolves problems fairly 26%

78%

66%

Listens and proactively follows-up on issues

Provide advice to improve my user experience 28% 67%

30% 69%

Allows multiple ways to interact with them

Allows me to customize products and services

52%

33%

87%

71%

Seeks input to develop new communication

Products/services 17% 45%


Gap

CSPs do not account for the extreme gap in emotive attributes of their customer base


The survey did uncover a number telecom-enabled services majority of consumers are willing to use /pay for

Retail/Shopping Banking/Insurance Healthcare

Public Services Travel & Transport

Nbr 1: Receive Mobile

coupons/Discounts (40%)

Nbr 1: Location-based

insurance claims (45%)

Nbr 1: Reminders for

medications/appointments (49%)

Nbr 1: Find nearest public/

government offices (38%)

Nbr 1: Geolocalization (46%)

Utilities

Nbr 1: Receive warnings about

weather condition (46%)


#1

all c

onsum

ers


26



February 2012

Bob Fox

Global Telecom Industry Leader

Global Business Services

[email protected]

Rob van den Dam

Global Telecom Industry Lead,


[email protected]

Contacts

WWW.IBM.COM/IIBV

mailto:[email protected]

mailto:[email protected]

Documents

Consumer Survey United States