“There must be a huge problem when, in such a core industry that touches everyone, both the customers and companies are struggling. The industry structure is an oligopoly, telcos have no incentive to innovate, and they’ve got big capex cycles… They’ve lost the sense of what it means to build a great product and customer experience.”

• Rameez Ansar, Circles.co Co-founder

Welcome to the second part of the Net Promoter Score (NPS) series! The first NPS article discussed how the Net Promoter Score can help support a telco’s bottom line. Here, we’ll answer these two questions:

• What has been hampering telco NPS scores?
• Are there proven ways to improve customer experience and NPS scores?

What Decreases a Telco's NPS score

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The telco industry has been notorious for poor customer service - in some cases, marketing professors even point to older telco ‘bad profit’ practices as poor examples of customer relationship management. Examples like these:

Complicated Billing and Bill Shock

“Why am I being charged for this?!”

Bill shock from hidden fees hidden in complex contracts while being forced into lock-in periods where you must pay a penalty for breaking the contract early are part of what puts the ‘bad’ in these ‘bad profits. 

This lack of transparency repulses customers and frustrates those who want to switch to better deals.

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Poor customer service experiences

Being placed on hold for long periods, customer service agents who get lost if you veer off the script, and having to hop through many hoops to get an answer.

You may have experienced at least one of these issues before, and it was related to telco customer service.

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Poor network quality

Spotty coverage can cause users to wander around looking for places with better reception, and during this painful period, they will consider switching to a more reliable mobile carrier.

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Proven Ways to Improve NPS

Every market is different, so we cannot promise a magic bullet solution. But what we can share is what has worked for our own markets.

Our digital-only telco brand, Circles.life, was started in rebellion against the 2016 telco industry’s bad profit status quo.

“It was a burning frustration that eventually boiled over,” says the former business consultant. “That an industry that touches everyone could be so backward in terms of innovation was unbelievable to me.” says our CEO and co-founder, Rameez Ansar.

“Why are we doing this? Why does the status quo have to keep existing? I think a lot of our people have bought into this vision, too, and have this feeling of righteousness that comes from fundamentally believing that we are righting some wrong,” he said regarding what kept him going to the Peak Magazine.

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Achieving +50 NPS and Smashing the Status Quo

We needed to make the telco experience everything it wasn’t back in 2016. We made NPS our core KPI and focused relentlessly on making the customer experience great. Our mantra is to give power back to the customers.

Onboarding needed to be seamless. Contracts needed to be easy to understand and give customers full control. Customer service needed to be delightful. Here’s how we managed to achieve an NPS above 50:

• Flexible, No-Contract Plans: We offer flexible plans that cater to our customers' diverse needs, ensuring they only pay for what they use.
  
  We release products based on their needs, such as Jetpac for jet-setters too.
  
  
• Fast Customer Support: Our customer chat response time averages around 27 seconds, significantly reducing wait times and increasing customer satisfaction.
  
  We look for ways to incorporate today’s technology to empower our customer service agents and improve customer service speed and accuracy.
  
  
• Bill Transparency: We prioritize transparency in billing, eliminating hidden fees and ensuring customers understand their charges. We pride ourselves on no bill shock.
  
  
• Rapid SIM Delivery: As we have no physical footprint, our efficient SIM delivery process helps customers start using our services as fast as possible.
  
  
• Personalized Experiences: Using data-driven insights, we tailor our services to meet each customer's unique needs, enhancing their overall experience.
  
  We also focus on experimentation through our in-app innovation engine and obsess over optimising our users' best experiences and offers.
  
  
• Rewarding Referral Programs: Our referral programs offer attractive rewards, encouraging promoters to spread the word and bring in new customers.

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Our Partners Benefit From This Too

We applied all this with our partner KDDI when developing their digital mobile operator brand povo. In 2020, they faced a challenging market:

• Stagnating revenues:
  • A mature, high-tech population with 91.6% mobile penetration, with 100% of them being postpaid users
  • The rise of over-the-top (OTT) messaging and voice services has placed significant pressure on financial performance
• Poor industry-wide NPS ratings
  • -52.7 for Mobile Network Operators
  • -21.3 for Mobile Virtual Network Operators
  • The NPS survey revealed that customer satisfaction on value-for-money failed to increase despite its importance.
• Increasing costs
  • Huge CAPEX investments are required to expand 5G infrastructure while maintaining high-quality service levels and existing 4G networks, which further strains financial resources.
• Shareholder value destruction
  • Telcos have been underperforming behind technology companies and tower operators, with lower EV/EBITDA multiples.

In 2021, we partnered with KDDI Digital Life (KDL), a subsidiary of KDDI Corporation, to launch povo2.0, Japan’s first fully digital 5G telco brand in just 16 weeks. 

Together we made customer-centricity the main focus of the brand. Povo2.0 was designed to offer fresh, personalized digital experiences tailored to Japan’s digital natives. The aim was to enhance customer engagement and to create and diversify new revenue streams for KDL. 

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No Bill Shock - Giving Control Back to Japan’s Digital Natives

To give control back to Japan’s digital natives, we pioneered “0 yen plans” giving users their choice of ‘toppings’ to customize plans the way they like. Toppings include content like the DAZN entertainment service.Various services are also available for a one-off fee. 

We’re committed to the ‘no more bill shock’ motto, povo2.0’s topping services plans ensures that customers only pay for what they expect. 

Staying Ahead with the Innovation Engine

To continue giving customers the best experience, we built an innovation engine sandbox in our app to optimise product offers and customer journeys. We developed this plan to increase customer engagement on the app and to optimise new monetization opportunities.

Our innovation engine helped KDL achieve a high engagement rate of over 30% and an indicative 8% ARPU increase for the engaged cohort. 

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KDL’s Results

Povo2.0’s focus on ‘revolutionizing digital experience’ resonated with customers. Together, we achieved +30 NPS - a full 50 points higher than that period’s industry average. In the 2024 Japanese Customer Satisfaction Index, pov2.0 took the top spot in the “mobile phone customer satisfaction” category with a high score of 76.8

povo2.0’s emphasis on ‘revolutionizing digital experiences’ has resonated with customers. Its NPS score stands impressively at +30 points, which is 50 points higher than the industry average, as highlighted in a 2023 joint case study by Circles and KDL. In the 2024 Japanese Customer Satisfaction Index, povo2.0 secured the top spot in the “mobile phone customer satisfaction” category with a high score of 76.8. 

povo2.0 also ranked first in the “impression index,” successfully engaging, retaining, and attracting consumers. With increasing adoption and interest in our brand’s offerings beyond core telco services, revenue diversification has become a key focus for KDL in its partnership with Circles.

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Have You Been Improving Your NPS Score?

T-Mobile and KDL have shown that high NPS leads to great engagement, retention, and revenue results. Measuring customer satisfaction with the telco experience through NPS remains highly relevant to telcos’ competitiveness. 

Being customer-centric and breaking the historical ‘bad profit’ status quo has proven to be a winning strategy for both KDL and us. 

Are you worried about catching up to your competitors with much better NPS scores? 

Don’t let your NPS score drop. Make sure you book free SaaS demo or consultation to explore how we can help you maximize NPS and transform your customer experience today.

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Get Your Free SaaS Demo

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References:

1. Circles.life: Rameez Ansar’s start-up gives Singtel, Starhub, and M1 a run for their money - The Peak Magazine
2. Circles.life: Rameez Ansar’s start-up gives Singtel, Starhub, and M1 a run for their money - The Peak Magazine
3. Giving Power Back to the Customers in an Ever-Disrupted World - Circles.life on Medium 
4. Circles & KDL Digital Life (2023). How award-winning telco KDDI Digital Life achieves ground-breaking NPS with povo2.0. https://circles.co/case-study/japan-the-first-digital-5g-telco
5. Impress Corporation (2024). 携帯電話の顧客満足度1位は「povo」、2024年度JCSI第1回調査(2/3) ["Povo" ranks first in mobile phone customer satisfaction, 2024 JCSI 1st survey (2/3)]. https://k-tai.watch.impress.co.jp/img/ktw/docs/1612/517/html/01_o.png.html 

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