Trust is defined as “to place confidence in, rely on.” Whom do customers trust to provide their wireless service? The importance of this simple question cannot be overstated with wireless carriers facing the stiffest competition in decades. And the field is increasingly more crowded as cable powerhouses like Comcast and Charter join the fray. With more than 90% of US households having cell phones and more than 50% being wireless only (a figure that is growing daily), few industries have such a massive, growing addressable market. And they all face one cold, hard truth: Failing to gain the trust of their customers could be a multi-billion dollar mistake.
That’s why we focused on brand trust in our latest consumer omnibus study. We looked at not only the traditional wireless providers but also other potential entrants, including cable and technology companies, to find out who could disrupt the usual suspects. And, even more importantly, through our technology industry research we explore whether it’s even a wise business move for the likes of Microsoft, Amazon and Apple to throw their hats into the wireless ring.
Who Can Disrupt the Usual Suspects?
Cable companies have been toying with the idea of expanding their service offerings for a while now, after having exited the wireless space about a decade ago. As wireless data speeds continue to improve and unlimited plans offer seemingly endless bandwidth, major MSOs have recently opted to re-enter the wireless industry. Comcast now offers its Xfinity Mobile service to current customers, and Comcast and Charter announced a partnership to share technology and other infrastructure to better compete with the incumbent wireless carriers.
But are consumers ready to “place their confidence in and rely on” these wireless outsiders? Well, for most cable companies—not so much. Individuals are, however, a little more open to welcoming innovative technology companies into the space.
What Defines Trust?
Let’s start by defining the factors at play. Here are several ways we found to gain consumer trust:
- Deliver excellent customer service (or fix it fast when you mess up)
- Provide strong security and respect customer privacy
- Have a history of product innovation
- Establish a proven track record in the industry
- Nurture positive prior experiences with customers
Conversely, consumers distrust providers that:
- Previously delivered a poor customer experience (the single most difficult hurdle to overcome)
- Are known to make billing errors
- Are perceived as too expensive or as consistently raising rates
- Fail to put the customer first
- Have poor network coverage
Given the factors that fuel trust and distrust, it’s clear why Apple and Amazon top the list of trusted companies.
Apple checks off all of the positives and has few negatives. And while they haven’t actually been offering much in the way of wireless service, they are seen as active in the mobile industry through their invention of the iPhone 10 years ago, which essentially redefined the cellular phone. Amazon is huge on customer service and has a reputation for being easy to deal with, but has little true tenure in the mobile space. Google falls a little further down the list as many are concerned about privacy issues. And because Android is not necessarily branded as a Google product, it doesn’t receive much credit for its industry tenure.
Who Are the Least Trusted Wireless Providers?
Identifying which companies are most trusted is interesting, but that only tells part of the story. When asked who they trust least, consumers generally name cable/satellite providers most frequently. However, some incumbent wireless providers also show up as least trusted—AT&T has the second worst trust ratings, and Sprint is only slightly better at fifth.
What Does it All Mean?
On the surface, it would seem that Amazon and Apple are best positioned to enter and succeed in the wireless market and the cable companies would be advised to stay away. However, a closer look at the telecom research data and the competitive environment reveals a potentially different scenario.
A halo effect can develop within a company, where a negative experience or reputation from one area can bleed over into other areas that were originally received positively. With the wireless world in a seemingly constant state of flux and limited experience in the field, Amazon and Apple may be better served to avoid entering the wireless business until they are extremely confident in their ability to execute flawlessly. They have the most to lose and should consider the risk of tarnishing the positive reputations they’ve earned in their core businesses.
On the other hand, Comcast may be onto something with its recent entry into the wireless space. It opted to initially offer these services only to existing Xfinity internet subscribers. This is a smart move since these existing customers are most likely to see Comcast in a positive light (remember: it is easy to switch carriers these days, so disgruntled customers are less likely to remain customers for long). Comcast is essentially neutralizing its greatest weakness—that a large percentage of the population has had a bad prior experience with Comcast. And, by using an MVNO agreement with Verizon, Comcast also has the strongest wireless network to back it up.
Of course there are other details to consider. To win the hearts, minds and wallets of wireless consumers, new and existing providers need to understand:
- How much do consumers trust their current wireless provider?
- Why do consumers trust or distrust their wireless provider?
- Who is in the best position to take market share away from the current top provider, Verizon? What about from AT&T, T-Mobile and Sprint?
- What makes these current providers vulnerable to threats from existing competition and potential new entrants?
The answers to these brand research questions and more can be found in our report, “What Drives Trust in the Wireless World.”