Markinor’s First Annual Mobile

Loyalty Survey

The South African authority on stakeholder measurement,

Markinor’s First Mobile Loyalty survey assists companies to
improve customer loyalty, retention and profitability.
This is the story of the pincushion (Leucospermum cordifolium). It reminds us to go about our business with a
spirit of enjoyment. Fun breeds confidence, and confidence, breeds excellence, which proves that we should take
having fun more seriously.
 Study Basics

Markinor’s Mobile Loyalty survey has elicited

the answers to the questions both network and
handset providers really would like to ask:
Will my customers do the things that
are good for my business?
• Will they continue to do business with me?
• Will they recommend the organisation as
a good place to do business?
• Will they be open to up and cross-selling opportunities?
• Will they limit their search for competitive offers?
Also, customers say they’ll make use of MNP, but
will their actions follow their intentions?
As part of a follow-up survey in the first quarter of this year,
Markinor will ask the same respondents whether they ineed acted
on the intention to make use of MNP and switch network provider.
What are Markinor Loyalty Reports?
Companies are constantly asking, “How do
we measure up to others in our industry?”.
The answer can often be hard to determine.
Markinor’s Loyalty Reports provide the
information needed to measure your company’s
success. These reports are specifically designed
to provide value for our clients in key industries.
Loyalty reports offer critical benchmarking
information, providing key comparisons and
perspectives on loyalty-related issues. By
helping your company understand how it
compares to industry norms, these reports
assist in developing mission-critical customer
loyalty management programmes to improve
customer loyalty, retention and profitability.

Network Providers Cell C Vodacom MTN Virgin Total

Number of respondents 401 400 399 40 1240
Handsets Nokia C Samsung Motorola Sony Total
Number of respondents 558 408 163 56 1185

• Face-to-face interviews were conducted in metropolitan areas

• Probability sampling was the selected sampling methodology
• Contract customers were interviewed
• Fieldwork dates: 18 August – 4 September 2006

Customer Relationship Assessment Tool

The instrument Markinor uses for the purposes of its loyalty

Business
studies, is the Customer Relationship Assessment Tool©. This is a
Success
holistic approach that enables companies to significantly improve
customer loyalty by intelligently acting on customer feedback.

Building loyalty among customers is not a random occurrence.

Like any other business function, this process can be
managed to make it more effective. In order to manage
customer loyalty though, companies must understand what
it is that affects their customers’ behaviour and attitudes. Business Enhancing Behaviours

Certain aspects of how a business operates exert a significant Loyalty

influence on the loyalty of its customers, while other efforts
have a lesser effect. By measuring and determining the Customers’ Attitudes
specific factors driving customer loyalty in your organisation,
you’ll be empowered to take charge of these factors. Touch Points / Experiences
Trapped vs. truly loyal customers
The relationships companies strive to establish with their customers
must result in more than retention or the simple act of repeat
purchases by the customers. After all, inertia can be powerful.
In fact, some customers stay customers because they are trapped.
Trapped customers intend to continue doing business with a
vendor, perhaps only because there are no viable choices, or
because switching costs are too high. Nevertheless, they stay.
So, do these trapped customers have the same impact on
profitability and growth as truly loyal customers?
Probably not, because the value of truly loyal customers goes far
beyond their repeat purchases. In the short-term, trapped customers
are likely to add more value to companies than lost customers, but
they will generally never add value like truly loyal customers.
Truly loyal customers exhibit other behaviours which are
value-enhancing. They not only remain customers, but
also tend to increase their levels of business. They also
are more likely to recommend their chosen vendors to
other potential customers. Customers who are not truly
loyal, including trapped customers, generally do not exhibit
these behaviors enough to grow shareholder value.
Behaviour
Accessible Truly Loyal
Attitude
High Risk Trapped
Theoretic model framework credited to Dick & Basu, Journal of the
Academy of Marketing Science, 1994. Matrix classifications based
on a proprietary statistical algorithm developed by Walker.
A customer loyalty measurement tool that does not distinguish
customers according to their desires, needs or sense of
obligation to the company, will omit information critical to
the accurate prediction of customer retention. In the customer
context, loyalty is both a behaviour and an attitude.
Suzanne Broadley
“Network providers – particularly
those who have developed
marketing strategies based largely
on price – should look beyond low
rates when it comes to keeping
good customers and encouraging loyalty.”
Coping in a Chaotic Marketplace
In the world of telecommunications, there is simply no denying
that much has changed in the past ten years. From online shopping
and hand-held PDAs to living with a cellphone by your side 24/7,
the ability, desire and necessity to communicate with one another
– often at a moment’s notice – come as second nature today.
Enjoying this rapid growth, telecom companies have spent
the majority of their time and resources using clever sales
pitches, competitive pricing and tempting “hooks” to entice
the surging wave of new customers to sign up for service.
Now, as the dust settles, we wonder whether, although
telecom companies have been generally successful in “getting”
new customers, do they in fact really “get” them?
The question is: Are telecom providers actually
in tune with that which makes customers happy
– and what it takes to make them stay?
The prevailing mindset among service providers seems to
be that in the burgeoning telecoms industry, new customers
would replace those lost to competitors. Such a philosophy
is quickly becoming outdated with changes in the regulatory
environment, opening up the market more to competitors
due to MNP. Telecom companies can no longer afford to
disregard churn when planning future marketing strategies!
While price still continues to be important, it is not a main driver
of loyalty for customers in this market. Industry changes aside,
those who succeed in this increasingly complex environment
will likely be those who meet and exceed customers’ service
needs – and do so with a true customer-centric focus.
Loyalty to Network Providers
% Truly Loyal Customers
Vodacom 69%
MTN 68%
Cell C 48%
Virgin Mobile was not reported on due to small sample sizes
Loyalty to Handset Brands
% Truly Loyal Customers
Nokia 76%
Samsung
Sony 61%
Samsung 50%
Motorola 48%
Heidi Brauer
“While the search for customer
retention is worthwhile, real
effort made be placed in the
quest for customer loyalty. Truly
loyal customers not only provide
a stable customer base, but also help grow
the business. And while trapping customers is
a strategy employed by many, it may not be
adding value over the long term if significant
attention is not given to customer care.”

Investment
• Full report and presentation on Network Providers:
R45 000 (excl. VAT)
• Full report and presentation on Handsets:
R25 000 (excl. VAT)
About Markinor
Markinor is the leading market research solutions provider
in South Africa. For over 30 years the words “Research” and
“Markinor” have been synonymous, however we realise that the
best products and tools are merely enablers. It is our thinking
that must provide solutions. In this way we ensure we feed
back actionable business knowledge by recommending relevant
strategic business and marketing solutions that work.
Access more of our thinking from
the thinking@markinor series:
• The Markinor / Sunday Times Top Brands survey
• The 3rd Annual Financial Services Benchmark survey
• The State of Marketing Survey
• The South African Employee Loyalty Survey
• Government Performance Barometer
• Socio Political Trends
• Woman’s Edge
• World Values Study
• AIDS Risk Assessment
Contact Us
To find out how the full report can benefit your organisation,
contact Suzanne Broadley on +27 (011) 686 8400
or suzanneb@markinor.co.za@markinor.co.za.
www.markinor.co.za
Key Findings: Network Providers
• Caring about your customers and
making it easy for them to do business
with you is paramount in driving loyalty
in this industry. Quality of products
and services, as well as brand equity,
influence customer relations greatly.
• South Africans appear to be more
committed to their chosen network
provider and their chosen brand of
handset in comparison to international
counterparts. Could it be the historic
lack of MNP in this market or due
to the relative novelty of having
access to telecommunications for
a large portion of the market?
• Currently, loyalty levels in the Network
Provider sector are high, but the
next year may prove tumultuous;
a third of Vodacom and MTN
customers and a disconcerting one
in two Cell C customers intend to
switch providers in the next year!
Key Findings: Handsets
• Brand power is king! Brand is
paramount in driving loyalty, followed
closely by customer focus. Quality
of products has great impact on
customers’ relationships as well.
• Innovation, after market leadership
and trust, is a critical success factor in
building brand value. It is, however,
crucial to consider innovation from
the customer’s point of view.
• Nokia outplays, outwits and may
just outlast all of its competitors
given its current loyalty status
and customers’ perceptions.
• Motorola should be concerned with
the degree of dissatisfaction amongst
its customers and consequently, their
wandering eyes. This brand may be
seen as the cheaper option, but doesn’t
necessarily deliver on those aspects
that actually matter to customers.