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The Data Digest: Forrester’s Next-Generation CX Index Reveals Why Customer Experience Is Important For Telecom Companies

Gina Fleming
Manager, Data Science
June 17, 2015

Having lived in a number of cities throughout the years, I have faced the typical problems of the cable customer — a limited number of providers and little ability to switch. And over and over again, I’ve been frustrated and disappointed by the customer experience (CX) I’ve received from these cable companies. I’m not alone: Forrester’s next-generation CX Index™ benchmarks TV and Internet service providers (ISPs) as among the lowest for CX quality. But as many new TV models start to emerge, consumers will be able to punish poor providers and switch more easily to new companies that meet their needs.

Forrester’s next-generation CX Index methodology sheds some light on which elements of the customer experience are most important and the biggest drivers for loyalty. With the CX Index, companies can analyze the quality of their customer experience and identify the financial impact of CX. We analyze 18 different industries for the CX Index, but TV and Internet service providers have a unique set of customer experience dynamics: CX Index scores for TV companies and ISPs are low, and customers are generally limited in their ability to switch providers. Our new report, CX Industry Spotlight: Telecom, tells TV and Internet service providers how customer experience affects consumer choice, the revenue impact of customer experience on the telecom industry, and what they should do about it. Here are a few highlights for TV and Internet service providers from the report:

  • The desire and the ability to switch are inversely related.Firms with customers who have more service options have, on average, higher CX Index scores than firms with customers who have limited service options. In contrast, the desire to switch declines with better CX. Customers who receive poor customer experience have the strongest motivation to switch providers, but they have the least ability to do so.
  • There is a linear relationship between revenue potential and CX.We calculated the revenue potential metric for each TV and Internet service provider customer in our study. Analyzing the relationship between CX and revenue potential, we found that the higher the CX Index score, the higher the revenue potential. Simply put: TV and Internet service providers stand to earn more by improving their customer experience.

The innovations happening in the broadcasting industry combined with customers’ increasing need for flexibility and transparency mean that TV and Internet service providers must offer great customer experiences if they are to win, serve, and retain customers. The CX Industry Spotlight: Telecom report shows what this means for the future of telecom. Forrester clients can check it out here.

If you are interested in more details about the CX Index and how you can leverage it for your brand, please contact data@forrester.com.

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