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Opinion: Growth opportunities in broadband market

Opinion: Growth opportunities in broadband market

“Buy cheap, buy twice”, so the old adage goes. Rob Walker (pictured), VP Decisioning and Marketing at Chordiant, explains how this old phrase identifies the opportunity for growth within the saturated broadband market …


It has been a busy year for broadband providers, M&A activity, triple play and quadruple play, and local loop unbundling has led to well documented price wars.

According to new research from Enders Analysis, a telecoms and media consultancy, the number of new subscribers to "always on" internet access has fallen below three million for the first time in three years.

What does this mean for the market? What happens when all the potential customers have been snapped up? How does your business grow?

We’ve now reached a point where those who want “always on” connections are already on. This means existing strategies to expand the customer base, need to be revised rapidly.

While the fierce price wars within the industry seem to indicate that a potential customer’s key concern is the cost of the service, in practice the situation seems to be more complex.

While cost is no doubt a key concern and likely to seal-the-deal, it is not long before the customer realises the cost often matches the service – cheap. While the market may not be growing, it is certainly churning. While the customer may already be on, this doesn’t mean they aren’t prepared to switch.

Point Topic, the leading websource on DSL and broadband, has released research which has shown that overall customer satisfaction has dropped by as much 15 per cent in the past year and that the number of customers who are very, or fairly, dissatisfied has nearly doubled.

As a result it is hardly surprising that customer churn continues to be a problem with one in 10 consumers switching providers in the past six months.

In the current market, where consolidation will bring fewer new adopters and there is so much churn, broadband providers must realise they cannot distinguish services through price alone.

Providers will increasingly need to entice customers from rivals. Where they cannot compete on price, there is one area where they can – the Customer Experience.

Offering a superior Customer Experience is the key to succeeding in an increasingly competitive market. When there is not much to separate providers in terms of price or service, Customer Experience is one of the only ways to differentiate services and reduce customer churn.

The essence of effective Customer Experience, is to adopt a strategy where the call centre agent’s focus is on conversation and understanding customer need rather than selling.

Our work with O2 has shown that through helping call centre agents to address the needs of their customers both during and after the sales process, rather than just selling products, sales will actually increase.

If a broadband provider adopts this approach, their customer will not feel a victim of the “buy cheap, buy twice” philosophy, rather someone who has chosen wisely, and is more likely to stay put.

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