The direct link between smartphone bugs and customer churn

Telecoms.com periodically invites expert third-party contributors to submit analysis on a key topic affecting the telco industry. In this article Stas Wolk, VP of Global Strategic Alliances at Cellebrite, looks at the relationship between smartphone software issues and customer dissatisfaction.

This year, there are now more mobile phones on the planet than people. As these phones become smarter they have become essential accessories in our everyday lives. Smartphones do more than merely connect people – they stream videos and music, monitor our health, manage finances  and offer easy access to the web.

As reliance on smartphones has become greater, as has the public’s expectation for a flawless operational experience. Consumers expect that their device is easy-to-operate and immune from bugs and glitches. Yet, given the range of applications a user can download, coupled with the frequency with which they are used, smartphones are bound to malfunction periodically.

Apart from major issues like complete device failure, smartphones are still often susceptible to sluggish application performance and woefully short battery life. Often the derivative of such problems is from malware introduced through third-party applications that cripple performance and mask problem sources. Many issues, however, are caused by benevolent, yet poorly-coded applications that conflict with other apps or keep services running even when the app is not in use.

The problem is that there are 1.5 million applications now available on the Apple App Store and the number of available apps is growing faster than ever – currently more than 1,000 apps per day – so quality control is getting increasingly difficult.

Poor performance may even be the result of a phone’s chosen configuration settings, leaving consumers needlessly suffering and unfairly blaming the hardware or the operator’s network for their dissatisfaction.

Whatever the source, a malfunction not only means frustration, but also dread over the inevitably complicated process of identifying and solving the problem. Still, when it comes to troubleshooting, customers’ heavy dependence on these devices leads only to greater dissatisfaction.

Recurring problems when technical support staff can neither find a hardware fault nor pinpoint any software defects present particular challenges. A common way to deal with this scenario is to wipe the phone of all downloaded applications and return the device to its factory settings. Upon return of the phone, however, the customer will likely proceed to download the same apps and reconfigure the same settings he or she had on the previous phone. Therefore, because the original problem was never identified, the user may unwittingly recreate the same environment that caused the initial problem.

Customers want fast fixes and convenient in-store service, and their expectations are rising so unless they receive adequate customer service, frustration quickly grows. Even when the issue may not be the operator’s responsibility to fix, ineffective in-store support can be perceived as a lack of provider care and assistance which could lead to customer churn.

A 2015 Ovum study of 4,000 smartphone users found that 14 per cent of respondents said they would look into purchasing their next handsets through different providers, based on their malfunction experience.

Meanwhile, the volume of customer service complaints remains enormous – and is growing. Nearly 70 per cent of smart phone users report having experienced device issues in the past year. Of those users who plan to switch providers following dissatisfaction with operators’ repair services, 25 per cent cited customer service as a ‘top three’ reason for churn.

Interestingly, when asked who they first turned to for help after discovering a smartphone problem, a staggering 28 per cent of consumer respondents said they turned to no one and continued to live with the problem on the phone. This figure jumps to 33 per cent for respondents who encountered problems after the warranty on the device expired. Customers experiencing recurring smartphone malfunctions are also less likely to report issues to their mobile providers. This ’slow-burn’ effect ultimately results in decreased customer satisfaction and increased churn.

It is important for operators to identify the most common issues with each handset – the roots of customer frustration – and execute a plan to satisfy customer needs through efficient service. By doing so, there is room for operators to differentiate themselves from competitors and regain coveted market share.

Operators must take ownership of the customer service experience within the ever morphing complex ecosystem of mobile operators, smart phone vendors, and platform and app providers. A revamped customer service experience could capture those customers at risk of switching to a different provider, while bolstering loyalty among the rest of an operator’s existing customer base.

According to the Ovum study, consumers prefer the convenience and immediate results of easy and effective self-serve solutions. Of all possible repair channels, 79 per cent of customer respondents said they would “definitely” or “likely” use such a solution to solve their smartphone malfunction woes. In comparison, 68 per cent responded that they would likely resort to in-store service, and 67 per cent would opt for online service.

Though self-help applications are much desired by customers, they often lack the necessary functionality and a simple user interface. Such an innovation would satisfy frustrated customers while freeing up valuable time and resources for operators.

In cases that involve more complex problems, operators could consider employing a remote technical support service.  Such an offering would free up operator resources, allowing customers who would otherwise seek in-store support to instead debug their phones elsewhere.

To expand quality of service, operators should make an enterprise-wide investment in diagnostic tools that empower customers and less-experienced staff with the capability to function as experts who can resolve a wider range of smart phone issues. These tools will enhance in-store support while reducing the number of costly external repairs that operators currently perform.

Operators that recognise the huge impact device issues have on customer satisfaction and take a proactive role to respond, diagnose, and address these issues, will be well-placed to enhance the customer experience – ultimately reducing churn and yielding direct financial benefits.

As Vice President of Global Strategic Alliances at Cellebrite Inc., Stas is focused on the company’s expansion, partnerships and acquisitions in the aftermarket services domain globally. Before joining Cellebrite, Stas led the AMS Mobility division for Jabil Global Services, providing reverse logistics and repair services to smartphone OEMs, wireless retailers and operators, with repair sites in Mexico, Hungary, the Netherlands and Malaysia. Jabil Global Services was acquired by iQor in 2014 for $725M. Prior roles include VP of Sales at the Neverfail Group, SVP of Sales at Omnilink, various roles at Research in Motion (BlackBerry) and COO of publicly traded Datalink.net. Stas earned his Bachelor of Science degree in Mechanical Engineering at Stanford University, and has an MBA in Finance and Marketing from San Francisco State University.