Telstra Really Satisfies…..some?

7 out of 10 Australians are satisfied with their mobile phone provider.
More specifically, a recent Roy Morgan poll has shown 71% of Australians are satisfied with their mobile phone company.
Phone companies make up some of Australia's most complained about companies. Telstra has long been our favourite whipping boy. The big promise of privitisation all those years ago was that prices would come down, service would go up and even better, we as private citizens could invest in the company and share the profits..
The government also made the bold move of introducing some competition. SingTel's Optus came in and were supposed to keep Telstra honest, and best of all keep prices down.
This paints a pretty good picture for the consumer, you would think. Enter new players in Vodafone, Virgin (aligned with Optus), 3 and a few others here and there and you've got increased consumer power and hopefully increased satisfaction.
So this poll tells us that the industry average for satisfaction is 71%, with Virgin Mobile right up there at 84%, and the dog that is Telstra down around 65%. Sounds about right?

Source: http://www.roymorgan.com.au/ (please visit this site – it is very informative!)

The thing that amazes me about Telstra is that one third of their customers are unsatisfied. How does a company of that size continue to GROW despite having one third of its customers unsatisfied? Now, I'm assuming that there was survey attached to this that included the service itself (are you satisfied with call quality, range of reception etc) as well as customer service and billing. Even so, this is an amazing statistic. If you spoke to any small business and told them that they would grow year on year on the back of satisfying only two thirds of the people that walked in the door you would be laughed at. And rightly so.
So how the hell does this big beast get away with this?
Whilst I'm really looking forward to the 2011 annual report for some more relevant finance information the fact remains that the graph above shows a company that has a satisfaction score of 61% in June 2010 whilst showing a revenue increase of almost half a billion dollars for that financial year.
To put it in perspective, Vodafone has a class action lawsuit being thrown at it and their overall customer satisfaction score is higher than Telstra's.
Wow.
So what's happening here? Possible explanations:

1. The satisfied customers are spending more. This can happen with increased fees or charges, or increased usage.
2. The customers that are leaving were spending less than the ones the company is gaining.
3. The market is growing in such a way that poor performers with fewer customers are still growing.

The other thing to note about satisfaction is that there is a big tie in to expectation. To put it simply, if you expect something very poor, and receive something good you will be extremely satisfied. Conversely if you expect something amazing and receive something that is merely 'good' then you will be very unsatisfied. The management of expectations is important because customers are a demanding pack and their wants constantly change. The old rule of under-promise and over-deliver is great in theory, but your competitors get all the newcomers if your offering looks meagre compared to theirs. The other problem for an organisation of Telstra's size is that it has the turning circle of a Mack Truck. Smaller organisations are much more adept at turning their organisation around.
The old rule of thumb about a one percent increase in satisfaction can result in a five per cent increase in sales is about to be tested, with Telstra's satisfaction rating going up 5% so far – we should therefore see Telstra hit some huge numbers in June. The reality is more likely to be that Telstra's mobile revenue will increase somewhere in the realm of 5-8%.
However much this telco giant frustrates me, credit is deserved for increasing the satisfaction rate across this period. It is a difficult thing for a company of that size. Well done.