Judgement day comes for TalkTalk as fresh data reveals mass exit of customers after hack

Customers have lost faith in TalkTalk following last year’s data hack and its share of the market has plummeted as a result, according to the latest research from Kantar Worldpanel ComTech.

The cyber attack last October cost the company upwards of £35m in one off costs to resolve the immediate aftermath of some 15,600 leaked bank account numbers and sort codes.

At the time, chief executive Dido Harding played down the long-term impact on the brand, saying "customers think we're doing the right things" and “in the end our customers will judge us over the course of the next few months, and not by mine or anyone else’s words right now".

However, it looks to have some way yet to go to instill confidence as Kantar reports that in the fourth quarter of 2015 seven per cent of TalkTalk’s broadband base turned away to a different provider.

Nearly a fifth of those leaving TalkTalk did so directly as a result of poor reliability – a significant increase on the previous quarter when fewer than one per cent cited this reason.

Imran Choudhary, consumer insight director at Kantar Worldpanel, said: “The provider saw its share of the home services market fall by 4.4 percentage points quarter on quarter in terms of new customers, only 1.4 per cent of whom gave reliability as a reason for joining the provider in the last three months – well below the market average.

“TalkTalk continues to offer some of the most attractive promotions across the home services market and almost a third of its new customers did choose it for this reason, but there can be no doubt that it lost potential customers following the major data hack. If it’s to recover from recent events TalkTalk will need to offer more than just good value.”

TalkTalk’s loss was BT's gain, however, as it picked up some 40 per cent of exiting customers. In contrast to TalkTalk, BT felt the benefits of an improved perception of reliability, with 12 per cent of new customers saying their primary reason for joining was because they saw it as a trusted supplier – twice the market average.

Overall, BT reached a share of 30 per cent for the broadband market moving further ahead of Sky, its nearest competitor

Despite Sky’s recent marketing push, its market share dropped two percentage points to 25 per cent.

And Virgin Media found itself crowded out of a busy marketplace in the last quarter, making small gains in broadband but dropping share in the TV market by six percentage points on the previous quarter.

Smaller providers in broadband such as Plusnet experienced a good quarter, increasing their share by focusing at the value end of the market.

Jennifer Faull

Jen Faull is Brands Editor at The Drum. Based in London, she has interviewed major business figures including top marketers from Mondelez, Unilever, Tesco, and Lidl.

All by Jennifer