In my first college course in marketing, we talked extensively about the catchphrase: “under-promise and over-deliver.” Setting correct expectations with consumers is vital to happy customers, positive reviews and word-of-mouth sales. As a result, I’ve always known the telecom industry’s tendency to advertise broadband speeds at the upper limit of what’s available creates problems. Rather than setting ourselves up to succeed, when sell up to broadband, we set ourselves up to fail.
The result is just what you would expect:
- Many customers call support complaining that they are “not getting the bandwidth they’ve paid for.”
- Carriers get many negative reviews online.
- Consumers have a healthy amount of skepticism that faster products will actually be faster.
New Technologies Present an Opportunity for Change
Last year, OTELCO rolled out new broadband products that use multiple DSL lines to deliver more bandwidth to homeowners. Because we’re using as many as four DSL loops that are theoretically capable of delivering 20Mbps each, we could have rolled out a product that advertised “up to 80 megabits per second.”
We could have, but we didn’t.
Instead, we introduced a product that would deliver 40 megabits per second or better. Then we let the customers who bought it get up to 60 megabits. For customers who didn’t want 40 megs or couldn’t get it because of their distance from our DSL equipment, we also offered 5, 10 and 25 megabit options. When possible, we let those customers have significantly more bandwidth than they were paying for. At long last, we are setting ourselves up to succeed.
The Results of Our Experiment . . . So Far
It takes a while for customers to adopt new services when they are offered, so we still have way too many customers on the old “up to” plans. That’s good and bad. It’s good because we can compare the performance of the two service offerings. It’s bad because we’re sure the new products are better and everyone should switch.
In general, customer disconnect rates are the highest on the slowest services offered. This is logical because customers need more and more bandwidth, and have historically been reluctant to upgrade to faster plans. When we compared new plans to old plans with comparable speeds, the results were astounding:
- Customer disconnect rates were 39% lower on the new “5Mb or faster” than on the old “up to 6Mb” plan
- Customer disconnect rates were 68% lower on the new “10Mb or faster” plan than on the old “up to 12Mb” plan.
When we stop saying “up to”, broadband retention rates improve – dramatically. Clearly, customers prefer to be pleasantly surprised with the speeds they get, rather than be disappointed. Maybe we’d make a few more sales if we called our 10Mbps or faster plan an “Up to 15Mbps” plan, but at what cost in upset customers and wasted installation labor?
Eyes on the Future
As carriers build more and more fiber-to-the-home networks, variability in broadband speeds will become less of an issue. While light loss does occur in fiber networks, they simply aren’t as sensitive to distance as DSL is. At that time, delivering on your bandwidth promise will simply be a matter of building sufficient capacity to handle the ever-increasing bandwidth demand of a connected world.
Until then, we’ll have happier customers if we only promise them what we’re sure we can deliver.