Cable Creams Telco on Telephone Customer Satisfaction

Using the latest J.D. Power ratings for customer satisfaction on phone service as a barometer, cable companies are not only beating telephone companies at their own game, they are crushing them. There has to be some sense of embarrassment on the telco side. Five factors are examined in determining overall satisfaction with the J.D. Power survey. In order of importance, they are: customer service, performance and reliability, cost of service, billing, and offerings and promotions. Cable voice providers rated higher than telcos in every region of the country. TDS Telecom was the highest rated telco, placing second behind Wide Open West, in the North Central Region. Telcos didn’t place any higher than third in the remaining four regions. The two largest telcos, AT&T and Verizon, ranked below the region average in several regions. Other interesting findings of the survey include:

• Satisfaction levels among customers who use Web channels for service inquiries are higher than satisfaction levels among customers who use a telephone to call a service center. On average, satisfaction averages 641 on a 1,000-point scale among Web users, compared with 626 for telephone users
• Overall satisfaction is higher among customers who bundle two or more services with one provider, compared with customers subscribing to phone service alone
• Satisfaction among “triple-play customers” — those subscribing to telephone, cable and Internet service — is 23 index points higher than among those customers subscribing to just phone service

I can hear the spin masters now explaining why cable is winning this satisfaction battle. Arguments will be made that cable is on a “honeymoon” with customers because they’re relatively new to the scene and are aggressively competing on price. There is some truth to that, but if there were ever a wakeup call to telcos, this should be it. Cable is beating telco at their own game – handily. We’ve known for some time that it’s easier for cable companies to add voice than for phone companies to add video, perhaps giving them a tangible advantage. It looks like cable is leveraging that advantage to the fullest. I have to admit that I was amazed at how easy it was to switch my phone service to Comcast last year. The technician came in (on time even), and within 30 minutes, had completely siphoned my $90 monthly ARPU contribution to Verizon, and handed an even better monthly ARPU of $140 on a silver platter to Comcast. I was floored by how uneventful the process was and how quickly the switch was made. Give cable their due. They have taken on the challenge of voice service quite competently, and appear to be having great success with it. These J.D. Power results only add to the evidence.