Network Quality is a Prerequisite, Communication Customer Evaluation Axes are Multi-layered [A.T. Kearney]

A.T. Kearney Corporation (Minato-ku, Tokyo, Japan Representative: Takeya Takafumi) has published a paper titled 'German communication customers prioritize network quality - but customer satisfaction is not determined by quality alone.' This paper analyzes factors influencing customer satisfaction for communication service providers based on a survey conducted by Kearney in the second half of 2022 with approximately 4,000 B2C communication customers in Germany.

The paper shows that while network quality remains at the core of customer evaluations, factors such as value for money, brand affinity, customer service, and privacy protection also influence customer satisfaction. Notably, network quality contributes 22% to purchase decisions, and value for money contributes 18% to satisfaction. Communication service providers are required to prioritize network quality while also identifying investment areas that meet varying customer expectations for each operator.

Network quality contributes 22% to purchase decisions, and value for money contributes 18% to satisfaction

According to Kearney's survey, network quality remains an important evaluation axis for German communication customers, contributing 22% to purchase decisions. On the other hand, value for money also contributes 18% to satisfaction, indicating that customer evaluations cannot be fully explained by network quality alone.

The background to this is the spread of new ways of working. A stable connection environment supports location-independent work, and the paper states that the ability to enable new ways of working accounts for approximately 25% of the importance of network quality. Communication service providers are required to design pricing and services that customers feel are worth the price, in addition to communication speed and network security.

Over 80 sub-factors analyzed, customer satisfaction and churn intention are directly related

The paper analyzes over 80 sub-factors influencing customer satisfaction. The results show that communication customers' intention to switch providers is more directly related to short-term customer satisfaction than long-term recommendation intentions. For example, if a negative experience occurs, such as being unable to use the network during an important call, the relationship between satisfaction and churn intention decreases exponentially.

This suggests that communication service providers need to identify specific factors that customers prioritize, in addition to network quality, and concentrate investments in areas where improvement is needed and performance is low. Regardless of how customer satisfaction is measured, it is important to identify areas where efforts are being wasted and areas that require immediate improvement.

Priorities diverge among the top three operators, Deutsche Telekom places approximately twice as much emphasis on network-related factors

Customer expectations vary by operator. The paper shows that Deutsche Telekom (Deutsche Telekom) customers place the most emphasis on network-related factors, which are approximately twice as important as those of O2 and Vodafone customers. On the other hand, O2 customers prioritize value for money in addition to network and customer service, and Vodafone customers tend to prioritize service provision and customer orientation.

This difference indicates that communication service providers need to select investment areas based on their own customers' expectations rather than implementing uniform improvement measures. The priority measures for improving customer satisfaction vary depending on whether the operator focuses on improving network quality, meeting expectations for price transparency, or improving customer service.

- About the Paper

Title: 'German communication customers prioritize network quality - but customer satisfaction is not determined by quality alone'

URL: https://www.jp.kearney.com/issue-papers-perspectives/network-quality-is-still-very-important-for-german-telco-customers-but-that-s-only-half-the-story

- Editors

Takeya Takafumi, Japan Representative, Managing Director Japan / Senior Partner

Graduated from the College of Arts and Sciences, the University of Tokyo. After working in business planning, corporate planning, and service development at a major telecommunications company, he joined A.T. Kearney. With over 20 years of consulting experience, primarily in the telecommunications, high-tech, and media sectors, he provides practical and highly effective consulting services, leveraging his experience in promoting various cross-organizational business initiatives. He focuses on themes such as digital transformation, overseas business strategy, new business strategy, restructuring of business portfolios, and business turnarounds, with a strong emphasis on practicality.

Taki Kentaro, Senior Partner

After graduating from the Faculty of Economics, the University of Tokyo, he joined A.T. Kearney. With approximately 10 years of consulting experience, he handles a wide range of themes related to management, including strategy, new business, R&D, M&A, marketing, sales, operations, cost, and human resources and organization, with a particular focus on large-scale digital transformation at the corporate level.

About A.T. Kearney

A.T. Kearney (Global Brand Name: Kearney) has been one of the world's leading management consulting firms for 100 years, trusted by more than two-thirds of Fortune Global 500 companies and government agencies around the world. With bases in more than 40 countries, our greatest strength lies in our people. Under the banner of 'Impact First,' we tackle the most challenging issues facing our client companies with innovative ideas and execution, and work together to achieve transformation. Since entering Japan in 1972, we have provided consistent support to leading companies in virtually every major industry, from strategy formulation to the execution of transformation. For more information, please visit our website https://www.jp.kearney.com/