What exactly is a Net Promoter Score (NPS), and why does it matter so much for telecom operators? NPS is a straightforward yet powerful tool used to gauge customer loyalty by asking a single question: “On a scale of 0 to 10, how likely are you to recommend our service to a friend or colleague?” Customers respond, and based on their ratings, they’re classified as Promoters (9-10), Passives (7-8), or Detractors (0-6). The overall NPS is then calculated by subtracting the percentage of Detractors from the percentage of Promoters. While telecom companies traditionally focus on technical metrics like network speed, data packages, and coverage to measure their service quality, NPS offers a more customer-centric view, revealing the likelihood of their services being recommended by users. This perspective is crucial as it encompasses not just the tangible aspects of the service but also the overall customer experience, which can significantly impact customer satisfaction and loyalty.
A recent analysis of the US telecom industry revealed a notable shift in customer perception and satisfaction. According to financial analysts at Evercore, both Net Promoter Score (NPS) and Customer Satisfaction (CS) scores for wireless services have seen a decline since late 2020. Intriguingly, Verizon, traditionally leading in these areas, has been overtaken by T-Mobile in the second half of 2022, a trend that persisted into February 2023. This change highlights the impact of T-Mobile’s decade-long Un-carrier strategy, which has fundamentally challenged and reshaped industry norms with customer-centric policies and innovative offerings. It’s a pivotal moment for telecom operators to reassess their strategies, taking cues from T-Mobile’s approach to enhancing customer experience and loyalty.
While pricing often emerges as a key factor in customer decisions to switch providers, the actual engagement with a telecom service delves deeper, focusing on how it fits into their daily lives beyond mere cost considerations. Once customers have signed up, their ongoing satisfaction shifts towards the service’s relevance to their time and daily routines, rather than just the quantity of data or speed provided.
T-Mobile’s innovative Un-carrier initiatives serve as notable examples of this approach. For instance, “Binge On” was one of the past offerings that resonated widely with users, allowing them to stream video content from certain services without it affecting their data allowance, aligning with the consumer desire for services that offer real-time value. Moreover, “T-Mobile Tuesdays” is another initiative that continues to refresh service benefits by providing weekly perks and freebies, thus creating memorable moments for users and offering value that extends beyond conventional telecom offerings.
These examples from T-Mobile’s Un-carrier strategy illustrate how telecom companies can deepen their relationship with customers. By not just focusing on traditional metrics but also on enriching the overall user experience with creative and user-centric services, telecoms can foster greater loyalty and satisfaction.
While T-Mobile’s NPS-centric strategy has shown success, other telcos might need to tailor their approaches, considering factors like economy of scale. A corporate-level strategy driven by NPS could benefit from focusing on micro-segmentation to achieve smaller, targeted wins. This approach can enable telcos to maintain their unique marketing campaigns while still enhancing customer satisfaction and loyalty in their specific contexts.