40% of U.K. mobile subscribers are at risk of churn over the coming 12 months, warned CEM specialist WDS on Monday.
The results of the company's latest Mobile Loyalty Audit, published at Mobile World Congress here in Barcelona, revealed that just 12% of customers are loyal enough not to be tempted by competitive offers or service disruptions.
In addition, WDS claimed existing loyalty indicators, such as Net Promoter Score (NPS), are misleading. Its own study found that 17% of subscribers currently considered a 'switch risk' were actually 'highly satisfied' with their operator.
"We've been measuring loyalty in a vacuum, assigning valuable retention budget based on customer sentiment and an out-of-date notion of what loyalty actually is," said Tim Deluca-Smith, vice president of marketing at Xerox-owned WDS. "The WDS Loyalty Audit shows that only 12% of U.K. customers have the level of loyalty we deem necessary to insulate them from competitive offers and service failures."
WDS's audit subjected customer loyalty to a 'stress test', identifying how much more likely to churn a user becomes when their operator raises their prices, or if a rival operator offers a cheaper tariff.
The study found that 67% of customers previously categorised as unlikely to churn would actually consider switching if their operator were to increase its prices by 10%. 14% of that same customer segment would switch immediately without further consideration. Meanwhile, just 34% said they would not churn if a rival operator offered to reduce their monthly tariff by 10%.
WDS also claimed its findings contradict the view that users churn due to price, device line-up or network coverage, since just 25% of respondents thought they got poor value for money, 21% thought network coverage was poor and 12% that availability of devices was inadequate.
Instead, the audit found that customers are more likely to churn because they don't feel valued or rewarded by their operator.
"Building trust, developing a sense of value and sustaining strong customer service are fundamental to securing long-term loyalty, especially given the level of parity that exists between operators' pricing strategies and network performance," said Deluca-Smith. "Satisfaction alone is no longer enough."