Customer Retention and Loyalty Becomes Top Business Growth Priority

ST. LOUIS, Nov. 21, 2011 /PRNewswire/ -- Amdocs, the leading provider of customer experience systems, today announced the results of a global survey that highlights the critical business importance of customer retention and loyalty programs.  The survey was conducted by leading analyst firm, Informa Telecoms and Media.

With 66 percent of operators believing that customers are less loyal today than they were two years ago, 70 percent of service providers cite customer retention and loyalty as the critical factor for driving growth, with a strategic marketing prioritization shift from customer acquisition and market share to long-term customer engagement.   Due to market saturation and increasing competition, 82 percent of service providers said that customer loyalty programs would be "very important" or "important" over the next five years to their company's strategy.

Key survey findings:

• Too little, too late: Sixty-five percent of service providers only initiate a retention program when the customer has started the process of leaving and 90 percent measure customer loyalty by churn rates. 
• Customer loyalty misconceptions:  Service providers saw service quality (97 percent), network coverage (95 percent), network capacity (92 percent) and customer care (86 percent) as the key drivers behind customer loyalty.  Yet in a separate Amdocs consumer survey, network coverage and good customer care are regarded by consumers as basic service requirements and do not comprise competitive differentiators.  Two-thirds of consumers stated that it was personalized and tailored services, proactive care and rewards for being loyal customers that would win their loyalty.
• Organizational challenges still block loyalty initiatives: Service and knowledge consistency across channels (94 percent), the ability to offer simple, transparent pricing (94 percent) and creating one integrated customer profile (89 percent) are regarded as vital in supporting customer retention and loyalty strategies over the next five years.  But only 21 percent of service providers say they have the necessary collaboration today between their IT and customer retention and loyalty departments to enable this.
• Different regions, different churn trends: Most regions show a linear growth trend in customer churn, with higher prepaid penetration regions facing the biggest customer loyalty challenge. The North American market, despite arguably facing the largest competitive threat, is the one market bucking this trend.  The service providers in this region have adopted loyalty programs centered on building a complete view and more in-depth knowledge of their customers, while also initiating loyalty programs tailored to the individual.  Respondents in Europe and emerging markets identified this as the approach they would need to take to compete more effectively.

"Customers today have many competitive alternatives and service providers will need to rely heavily on loyalty strategies to combat competitors' aggressive offers to attract new subscribers in saturated markets," noted Julio Puschel, senior analyst and head of operator strategy for Informa Telecoms and Media. "Customer retention and loyalty, far from being a cost center, will become a new center of growth, provided that operators understand what their customers really want and devise their offers accordingly. Importantly, customer retention and loyalty programs need to be initiated early in the customer lifecycle and be present during the entire relationship between operators and clients, as opposed to relying on belated efforts to prevent churn."

 "The only way to earn loyalty is through deeper customer engagement. Customers demand a high quality experience across all touch points, starting with their first service experience and continuing over the course of the customer's lifetime," said Rebecca Prudhomme, vice president of product and solutions marketing for Amdocs. "To do this, service providers must look at the customer holistically and provide them with a simple, proactive, personalized and consistent experience across all channels of interaction."

Amdocs' CES (customer experience systems) portfolio allows service providers to differentiate themselves with a unique, real-time customer experience. The company's customers include some of the world's largest service providers including AT&T, Bell Canada, Comcast, Sprint and Vodafone.  To support service providers in delivering a superior customer experience, Amdocs recently introduced Customer Management 8.1, the market's most comprehensive suite of customer management (CM) products. Amdocs CM 8.1 enables better integration of back-end systems to provide access to relevant and contextualized information for a superior customer experience that drives customer loyalty. 

The survey results are based on a qualitative survey of director-level and above marketing and business executives responsible for retention strategies at 40 service providers across North America, Europe, Asia Pacific and Central and Latin America. The interviews were conducted from June to July 2011.

Supporting Resources

• Read the full report, 'Building customer loyalty, a strategy for growth'
• Learn more about customer retention and loyalty strategies
• Keep up with Amdocs news by visiting the company's website
• Subscribe to Amdocs' RSS Feed and follow us on Twitter, Facebook and LinkedIn

About Informa Telecoms & Media

Informa Telecoms & Media (www.informatm.com) is the leading provider of business intelligence and strategic services to the global telecoms and media markets.

About Amdocs

Amdocs is the market leader in customer experience systems innovation. The company combines business and operational support systems, service delivery platforms, proven services and deep industry expertise to enable service providers and their customers to do more in the connected world. Amdocs' offerings help service providers explore new business models, differentiate through personalized customer experiences and streamline operations. A global company with revenue of approximately $3.2 billion in fiscal 2011, Amdocs has over 19,000 employees and serves customers in more than 60 countries worldwide. For more information, visit Amdocs at www.amdocs.com.

Amdocs' Forward-Looking Statement

This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs' growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, Amdocs' ability to grow in the business segments it serves, adverse effects of market competition, rapid technological shifts that may render the Company's products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future, however the Company specifically disclaims any obligation to do so. These and other risks are discussed at greater length in the Company's filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2010, filed on December 7, 2010 and our quarterly 6-K filed forms furnished on February 8,  May 11 and August 8, 2011.

SOURCE Amdocs