Telcos: up your prices, lose customers
Networking switching stats show effect of tariff tweaks
Mobile providers rely on their customer base, yet unlike hardware manufacturers, developing a loyalty is difficult. With so much competition, increasing prices can have a significant impact and send customers sniffing elsewhere.
Mobile tech website Ken's Tech Tips tracked the popularity of the UK's major mobile operators by trawling through thousands of responses to its Porting Authorisation Code (PAC) Finder application, designed to guides people through the process of transferring a phone number from one carrier to another.
Over the last nine months, the site examined 33,641 responses, monitoring the number of customers joining or switching networks in a given month.
Source: Ken's Tech Tips
According to results, ever since Three launched its all-you-can-eat data plan, The one, it has been on quite the rise and now dominates the market after overtaking a now-sinking Tesco in February. The giant grocer has been suffering ever since it scrapped its popular £10-a-month 500-minutes tariff in January.
O2 is least popular and took quite a bashing in March when it increased prices. The telco's low scores in this study are attributed to its decision earlier this year to focus on high-value customers and not chase volumes.
Orange was already declining when it upped PAYG prices.
What is clear from this is that when mobile operators hike up their prices, they really do lose customers. Punters don't just put up with the increases - they will shop around. Popular wisdom has it that consumers are generally a lazy lot who don't shop around. Here's evidence that they do. Telcos, take note. ®
Stop giving the good deals only to new customers and we'll stop leaving.
What exactly does that graph show?
1) The Y axis for the graph seems to be "Ken's Tech Tips Index (Monthly)". That's completely meaningless - what on earth does it mean?
2) Is the Y scale linear or logarithmic? (I guess linear, because that's the default you'd use if you don't know what linear and logarithmic mean). Also, the lack of labels on the Y axis makes it hard to read.
3) The Y axis is labelled "(Monthly)", yet the graph appears to be a smooth curve. Are the parts between the month points real data, or are they made-up pretty wavey lines? (I suspect they're made-up pretty wavey lines. As other people have said, the graph seems to respond just before price rises, which is consistent with made-up data but not with real data).
4) What's the sample size for this data? And is it a random sample? If it's not a random sample, what are the biases? Is this biased towards the type of people who will compare prices online and find the cheapest deal? If so, then OF COURSE the data will show price sensitivity!
... ok, after looking at the linked article, the graph shows ( (number of customers joining the network) / (number of customers leaving) * 100). I.e. it's in percent. This makes the 100% point very important, as it's where a network switches from shrinking (score below 100) to growing (score above 100). So the lack of a horizontal line at 100% (or even a mark on the Y axis!) is a grave error.
very bad statistics, overinterpreted
Without any hint to what proportion of the entire market are switching this tells us *why* *some* people are switching. It doesn't tell us whether tariff changes make significant numbers switch provider.
So interesting though the trends shown may be, it's impossible to say whether this confirms or refutes the "consumers are generally a lazy lot who don't shop around" meme. I'd guess that meme is perfectly safe though ;)