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Nearly Two-Thirds of German Broadband Customers Would Switch Providers
Deutsche Telekom Customers Least Swayed by Competitive Price Discounts
MUNICH, GERMANY - December 18, 2008 - Although seventy percent of German Broadband subscribers report being satisfied with their current provider, nearly two-thirds would defect if offered a 20% price reduction, according to a report just published by analyst firm Strategy Analytics. Deutsche Telekom customers were among the least likely to be influenced by competitive price offerings.
The survey, "Broadband Satisfaction and Customer Churn: Germany 2H'08," was fielded in the fourth quarter of 2008, and focuses on the so-called "three pillars" of customer churn: customer satisfaction levels, propensity to churn, and perceived obstacles to defecting. Respondents were presented with various broadband speed and price scenarios to gauge sensitivity.
Germany, the largest Broadband market in Europe, is among one of the most competitive as well.
"With the continued consolidation in the German market, fewer and fewer Broadband Service Providers (BSPs) will be competing for the same pool of customers," noted Ben Piper, Analyst and Director in the Strategy Analytics Digital Consumer Practice. "The focus will change from one of new customer acquisition to one of customer retention."
To measure perceived obstacles to churn, panelists were asked to rate the importance of various non product-related metrics (including inconvenience of installation, attitudes toward other providers, hassle of returning equipment) in their decision of whether or not to defect.
A key finding from the study was the importance German consumers placed on the perceived hassle of scheduling installation, and on familiarity with their present BSP.
"German BSPs wishing to acquire customers from the competition have an opportunity to differentiate on factors beyond product performance," said Piper. "On installation, for example, the operator who can guarantee a `seamless and stress free' connection will be at an advantage."
The survey polled 509 German "broadband decision making customers," and includes data from the top German BSPs, including Deutsche Telekom, Alice/Hansenet, Arcor, Kabel Deutschland, United Internet and Unity Media.
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