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Cable's Customer Satisfaction Tangle

By Paul Korzeniowski CRM Buyer ECT News Network
Dec 2, 2008 4:00 AM PT

Cable companies and customer satisfaction: The two terms are often considered antithetical. Through the years, these corporations have earned a reputation of being slow to respond to customer inquiries, inflexible and callous. Now as new competitors tread on their cash cow video services, will these services providers change, or will their rigidity cause them to lose business?

Cable's Customer Satisfaction Tangle

The notion of cable companies as poor service providers has been borne out in numerous consumer satisfaction surveys. Recently, Parks Associates found that that subscribers to satellite television and IPTV (Internet protocol television) services are significantly more likely to be satisfied with their decisions than both basic and digital cable subscribers.

The dissatisfaction stems from a number of shortfalls. In many cases, it starts with the long waits associated with cable service installations. Service pricing has been another bugaboo. Also, cable companies have been unable to respond to customer inquiries in a timely manner and have generally been very regimented in how they service customers.

So, the key question becomes: What lies at the foundation of these problems? Heritage could play a role. "The cable companies' roots were in monopolies, so in many cases, that created a corporate culture where customer satisfaction was a low priority," Mike Paxton, principal analyst at market research firm In-Stat, told CRM Buyer. In many instances, cable companies were given exclusive rights to various geographic areas and therefore had no incentive to provide good -- let alone great -- customer service.

Pricing is another area where cable companies are often viewed as inferior to their competitors. "Cable companies have focused on delivering product bundles, but customers view their services as much more expensive than those from competitors," Kurt Scherf, vice president at Parks Associates, told CRM Buyer.

Customer Churn Hinders Cable Company Capital

Can the cable companies change customer perceptions? They may not have a choice. "Consumers have shown a willingness to switch video service providers when they are not satisfied," Scherf said. Satellite TV suppliers and IPTV providers have been very aggressive in trying to convince cable customers to switch to their services, and they represent a significant threat to cable's core business.

Cable providers are not oblivious to the challenges they face. "Cable companies have been making significant investments in time, money, and resources to improve their customer service," Elroy Jopling, research director at Gartner, told CRM Buyer.

These companies were notorious for forcing customers to remain at home at least a full day to install their services. That mandate has been loosening. Many have outsourced the process to third parties, no longer require that customers sit and wait for all-day service appointments, and schedule installations within one-hour timeframes.

Winning a Few Customer Service Surveys

Though cable companies rarely rise to the top of customer satisfaction surveys, they're not always the biggest losers, either. In fact, in areas such as voice communications, they have regularly bested telcos. "Cable companies have made impressive gains -- millions of customers -- in voice communications during the past few years," Gartner's Jopling said.

Market changes may also be skewing the customer service responses. Whenever a company enters a new market, it has a clean slate and is able to build a pliable, leading edge support infrastructure. As a result, the new video providers often have more modern, streamlined customer service centers than cable companies.

That "clean slate" nature also applies to customer perceptions. "Satellite service and IPTV providers are now in a honeymoon period with customers, and it will be interesting to see if their high marks in customer service remain as the market mature," said Parks Associates' Scherf. Consumers tend to remember negative experiences more than positive ones, and many have had only a limited number of interactions -- and therefore a limited number of possible bad experiences -- with the new entrants.

Throttling May Create Problems

While there has been progress on some customer service fronts, cable companies have also managed to stir up controversy in other arenas. Recently, some have started to talk about -- and others have actively participated in -- regulating customers' Internet use, either by restricting bandwidth-intensive customers from sending and receiving lots of data, or by charging such customers higher prices than other users.

Comcast landed at the center of this controversy when it was revealed that the company slowed the connection speeds of users who frequently used BitTorrent for file-sharing activities. The resulting negative publicity has tarnished the cable company's customer service reputation in the eyes of some users.

Other carriers have also been making similar changes to their services but managed to avoid a public bashing on the scale of Comcast's. Canadian cable supplier Rogers Communications made a smooth transition to tiered services, Gartner's Jopling noted. "Transparency is the difference between the two cases," he said. Rogers explained to its customers the reasons for the change before it was made and solicited their input. Comcast simply made the change.

In sum, customer service continues to be a problem area of cable companies. They have invested money and shown improvement in new markets but will need to do more to satisfy their traditional video customers.


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