How Service Quality Impacts Customer Satisfaction in Telcos

At Ultimate, we work closely with some pretty big telco providers in Europe, to help them improve the quality of their customer service with automation. So it’s safe to say that we care a lot about this topic. In this article, we explore the five factors that impact customer perception of service quality amongst telcos, and identify the most crucial ones, with some expert advice from AKEO Télécom Customer Relationship Manager Reynol Sotomayor

How to measure service quality amongst telcos

There are quite a few studies that have looked at the impact of service quality on customer satisfaction in telecommunications companies across various parts of the globe. For the most part, these studies identify five factors that could predict the quality of the service provided by the telco in question. These are as follows:

• Reliability: The telco’s ability to deliver their promises on time.

• Responsiveness: The degree to which telco customers perceive their provider’s readiness to assist them promptly.

• Assurance: The ability of the telco support team to communicate trust to their customers and the degree of courtesy shown by agents to customers.

• Empathy: The degree to which specific telco customer needs and preferences can be understood and articulated, and the care and importance given to each individual customer.

• Tangibility: The evidence of facilities, personnel, and communication materials the company uses while providing its services.

It’s been proven that these are the most important factors to telco customers’ perceptions of high-quality service (some more than others, and we’ll get into that in the coming sections).

But what is high-quality service? It’s easy to say that service should exceed customer expectations — but what does that really mean? Customer expectations are influenced by many factors, including personal needs, previous experiences, referrals from other customers, and the telco provider’s communication strategy. But all these factors are intangible.

Luckily for those of us who like to read tangible data, it’s possible to calculate service quality with a math equation.

It looks like this:

Service Quality (SQ) = Customer’s Perception (P) – Customer’s Expectations (E)

In other words, service quality is equal to the difference between a customer’s perception (what they experience) and their expectations (what they’d hoped for).

Why service quality matters for telco customers

So now that we have identified the factors that affect the perception of service quality for telco customers, we need to consider why this matters.

Customer Relationship Manager at AKEO Télécom in France, Reynol Sotomayor, explains:

“We have learned that, in order to ‘win hearts and wallets,’ telco companies must not only deliver amazing technology, but also prove that they have the customers’ best interests in mind while providing an outstanding customer experience.

In France as in other European countries, telco customers are switching from brand to brand to find an experience that matches their expectations. In this context, the experience a company offers is increasingly its differentiator.”

The fact is, it costs telcos a lot more when a customer switches providers than it costs the customer themselves.

Let me explain. Retaining a customer usually just requires maintaining the same level of service quality — which is pretty straightforward. However, acquiring a new customer usually means a telco has to up its service quality game to be better than the customer’s existing provider — which can be costly.

On top of all that, Covid-19 has put a magnifying glass on the importance of high-quality customer service for telcos. Reynol shares his telco’s experience:

“Our customers' needs in terms of communication have been at the center of our team's handling of the Coronavirus Crisis. With customers confined at home for an extended period, we found out that their needs in terms of using mobile devices, social media and high speed connections have grown to levels never expected. And every time those needs were not met, we needed to increase our level of attention and listening in order to avoid dissatisfaction. Thankfully, we have been creating the kind of relationship with our customers that builds trust and confidence, which is beneficial in time of crisis.

See how we helped multilingual telco Telia save 2,835 hours of agent effort per month (the work of an 18-person team!)

Service qualities that most impact telco customers

Considering all five factors that can influence service quality amongst telcos (reliability, responsiveness, assurance, empathy, tangibility), which have been found to be the most integral?

The studies showed that the largest mean difference between expectations and perceptions of service came from the assurance perspective. In other words, the telco support team's ability to communicate with customers in a trustworthy way was found to be lacking.

Empathy was also found to be a crucial factor in influencing customer satisfaction amongst telcos.

This demonstrates a significant need for telcos to communicate with their customers with regular updates, and respond to their customer enquiries as best they can in real time. Telco customers also appear to expect their support agents to be polite, patient, and sincere, as well as understanding of their circumstances.

And indeed, Reynol agrees that concentrating on these factors has helped set his telco apart from the competition.

"Taking the time to solve every single customer's concerns and answering their questions in a clear and direct way, has been key to our lasting success." - Reynol Sotomayor, Customer Relationship Manager, AKEO Télécom

Terms like ‘customer satisfaction’ and ‘high-quality service’ are vague and can mean different things to different people. Luckily for telcos, there's some pretty solid research out there that drills down to the most important factors that influence telco customer perception of service quality. These studies all point to soft communication-type skills as being the key to happy, loyal customers — and our conversations with our telco clients, as well as other telco customer service experts, confirm these findings. Specifically, assurance and empathy have been shown to be the most crucial elements that telco teams should be placing their focus on — particularly during such uncertain times, when telco services and remote communication is more important than ever.