Technology companies are showing signs of healthy growth in some early moves into the communications industry. This is pushing traditional providers to rethink customer experiences. Consumers view technology companies as solutions providers who help them accomplish the tasks of daily living. They enhance customers’ lives with services and hardware that they use multiple times throughout their day. Apps, services, and hardware have become part of customers’ routines and forge a deep loyalty with big tech brands. When people want to listen to their favorite song, get directions to their favorite restaurant, or buy a gift for their best friend, they turn to big tech solutions to get things done. This is despite the fact that in most cases, people are using a communications service provider in order to access these services.

With more choices, the incumbent communications service providers are no longer the default. As alternatives emerge, people are ready and willing to explore choices beyond their traditional providers. Seventy-eight percent of wireless customers and 76% of cable customers said they are at least somewhat likely to switch to a tech provider. What’s more, a growing number of cable customers are cutting the cord altogether, opting to rely on streaming entertainment services (33%) and wireless internet access (20%).

Customer satisfaction reduces churn

When it comes to customer satisfaction, communications service providers ranked behind both technology and ecommerce, barely edging out financial services and pharmaceuticals. In a world where the vast majority of customers (80%) will abandon a retailer after just three negative experiences, providers don’t have much room for error.

Satisfaction with providers across different industries

Showing % very or extremely satisfied

When asked about what might make them consider switching internet service providers, respondents cite price and speed at the top. Unsurprisingly, with hybrid work models growing in popularity, reliability is also a big factor. In fact, more than 1 in 10 consumers say they’d consider changing internet providers for either better reliability (13%) or improved customer service (12%).

Customers are willing to change providers for

Showing % willing to switch

How can traditional providers increase satisfaction? How do they separate themselves from the pack?

Both online and in-store experiences leave much to be desired 

Over half of respondents (51%) prefer to do business online; in fact, 64% reported using their provider’s website over the last month. However, that doesn’t paint the whole picture. Forty percent of customers also visited the store over the same time period, and 35% say they prefer to do business online and in stores. This means that optimization of physical experiences cannot be ignored.

Customers want the best of both worlds. Providers need to plan for, and support, the joining of online and offline experiences. The ability to move from one channel to another is a key customer success factor. Providers who don’t make this easy could see significant repercussions. Forty-one percent of consumers use self-service tools to make a purchase, activate services, or make account changes. Those same customers need to be able to seamlessly transition to an in-store purchase when the situation calls for it.

Customers prefer to use a combination of self-service and assisted services

Percentage of customers who use self-service vs assisted-services to make a purchase, activate services, or make account changes:

However, only 22% of respondents reported that self-service options were excellent. With so much room for improvement, providers with superior digital self-service channels could gain a competitive edge.

In-store experiences also need attention. Only 25% of respondents said store associates were knowledgeable, and 23% said they received efficient service.

Customers want to feel like they matter throughout the customer lifecycle

Fifty percent of wireless customers and 47% of cable customers believe they get the best service when they threaten to switch to a different provider. This indicates that more work needs to be done at addressing customer satisfaction throughout the lifecycle — not just when people threaten to leave. Providers who are able to gain insight into their customer base and provide better service at every touchpoint could gain a significant edge in meeting customer needs and expectations. Good insights into consumer behavior are invaluable. They enable providers to tell which customers are about to cancel, and could help guide next best actions to decrease their likelihood of leaving.

When asked what (other than reducing the monthly bill) might increase customer satisfaction, many customers prioritize transparency (no hidden fees), discounts on streaming services, and personalized offers/deals.

Ways in which cable carriers can improve customer satisfaction

Options selected most frequently:

Values, and transparency, matter 

Customers care about the values of the companies they buy from. Sixty-six percent of customers have stopped buying from a company whose values didn’t align with theirs — up from 62% in 2020. This is particularly true for environmental practices (78%), economic injustice (75%), and racial injustice (73%). Here, providers are delivering, with many employees stating that their companies think carbon accounting (79%), closing the digital divide (84%), social responsibility (80%), and supporting underrepresented minorities (79%) are extremely or very important.

As more of our personal and professional lives move online, it’s imperative that providers meet business and consumer needs for greater bandwidth with faster throughput, lower latency, and improved reliability. Next-generation technologies like 5G and fiber have companies across multiple sectors excited about the opportunities these services may provide to meet consumer needs and expectations.

Making the most of your 5G network investment

Customers will pay more for 5G

Communications service providers have had a difficult time communicating the value of 5G and, as a result, many customers are still unsure as to the opportunities it provides. Our research found only 44% of respondents were “very familiar” or “extremely familiar” with 5G technology. However, 67% of respondents said they would be willing to pay more for 5G.

5G infrastructure will open B2B opportunities inside and outside of the industry

The B2B opportunities could be a game-changer when it comes to 5G, and most providers are exploring opportunities and investing in this area. As David Fan, communications industry vice president and general manager at Salesforce, explained, “Service providers know there is no single ‘killer app’ for 5G and are exploring a broad range of monetization strategies including new B2B applications, network-as-a-service (NaaS) offerings, and digital marketplaces with ecosystem partners.” When asked about how they believe investment in 5G infrastructure might enhance ROI, many communications providers agreed that it would encourage partnerships and bundling opportunities across multiple industries. This would allow providers to meet B2B customers’ needs by offering a broad range of value-added service propositions from multiple providers with embedded connectivity.

The vast majority of providers believe businesses would be interested in partnering with communications service providers investing in 5G infrastructure

Percentage of providers who think 5G would attract more partnerships and bundling options in the following areas:

Providers see value in fiber investment

It’s widely accepted that fiber is a faster, more reliable choice when it comes to wired connectivity. Both public and private enterprise are eager to get into the game as evidenced by the influx of investment in this area from private equity, in particular. Traditional providers are prioritizing fiber infrastructure investment, and taking advantage of subsidies to bring greater access to communities worldwide. Eighty-six percent of respondents said their company invested in fiber optic connectivity and solutions in 2021, and 87% say they plan to increase that investment in 2022 and 2023. Despite the competition in the market, incumbent providers are well-positioned to maximize their market share across the fiber broadband market due to their existing rights-of-way with municipalities and regulatory authorities.

Majority of providers are investing in hyperscaler partnerships

Now that networks are being modernized and made accessible via APIs, the challenge becomes attracting developers who know how to build and connect applications with devices. Hyperscalers (companies, like AWS or Google Cloud, with the ability to scale computing resources on demand) have dedicated developer communities that could be great assets to traditional providers. These companies are also already delivering infrastructure-as-a-service (IaaS) better, faster, and cheaper. Many providers see value in partnering with hyperscalers in order to increase efficiencies. In 2021 and 2022, 88% of providers invested in hyperscaler data centers, with 85% saying they will increase their investment in 2023. Leveraging these partnerships has the potential to offset infrastructure costs for service providers, enabling them to focus investments in core capabilities — like the network and network monetization opportunities.

While 90% of employees agree or strongly agree that their company makes it easy to communicate internally to resolve customer cases faster, this is not having a strong enough impact on overall customer satisfaction. Only 62% of customers feel satisfied with their current providers.

Eighty-eight percent of customers say the experience a company provides is as important as its products or services. Of those, the vast majority expect a company to understand (73%) and anticipate (62%) their unique needs and expectations. Digital transformation and streamlining operations are key steps to meeting these expectations and providing personalization at scale. Digital transformation doesn’t just benefit the customer; 91% of provider employees said reimagining operations would reduce bottlenecks and redundant processes, while also helping their companies save money.

Business decision makers crave intuitive tools and better online experiences

B2B digital experiences continue to be more important than ever. In fact, 63% of B2B customers say they prefer to engage through digital channels. Powerful self-service tools (like customer portals) that enable activities like large-capacity transactions, orders, purchases, and MACD (Move, Add, Change, Disconnect) events anytime, from anywhere are key to delivering excellent service.

However, B2B respondents are dissatisfied with the totality of online experiences offered by providers. B2B users report experiencing frustration when trying to manage accounts online (39%), make large purchases (36%), and request changes in service (36%). B2B users also reported frustration when using assisted digital services (31%) and self-service (34%) tools. Also concerning is that only half (53%) of procurement employees said they felt comfortable managing their enterprise accounts online without sales agent assistance.

Next steps in the evolution of the communications industry

The winds of change are blowing in the communications industry. To avoid commoditization, providers are focusing on differentiating themselves by creating enhanced customer experiences, finding new avenues for revenue, and increasing efficiency. “The future of the telecommunications industry relies on strategic investment in new opportunities, as well as commitment to digital technologies, that will improve customer experience, business agility, and operational efficiency,” said Fan at Salesforce.