CBS62logoNEW2013_blue_final_header_White wwj950-sm2011b 971-ticket-35smb 35h_CBSSportsRad_Detroit

Satisfaction With Cell Phones, Cable TV Up; ISPs Debut at Bottom of Index

View Comments
computer-url
mattroush Matt Roush
Matt Roush joined WWJ Newsradio 950 in September 2001 to spearhead the...
Read More

ANN ARBOR — The annual Information Sector report from the American Customer Satisfaction Index shows that customers are happier with telecommunication services and technologies than they were a year ago.

The Information sector benchmark — the combined aggregate score for wireless telephone service, Internet service providers, subscription television service, cellular telephones, fixed-line telephone service and computer software — climbed 0.6 percent to 72.3 on a 0 to 100 scale.

The improvement, along with gains for energy utilities and health care (reported by ACSI in April), pushed the national customer satisfaction benchmark up 0.4 percent to 76.6.

“Customer satisfaction with the Information sector is improving, but none of these industries score higher than the national average,” said Claes Fornell, ACSI founder and chairman. “Limited competition combined with high consumer expectations for information services are a formula for relatively weak buyer satisfaction, despite the gains.”

Subscription TV: Customer Satisfaction Improves in a Low-Performing Industry

Subscription television service ended a three-year run of stagnating customer satisfaction with a 3 percent gain to an ACSI benchmark of 68. While the boost is good news for cable, satellite and fiber-optic television providers, the industry remains the third worst of the 43 industries covered in the ACSI.

Among TV service providers, those offering service via fiber optics or satellite earn the best marks for customer satisfaction. On average, fiber-optic and satellite service receives an ACSI score of 72 compared with 63 for cable service. Verizon FiOS stays in first place at 73 (though that is down 1 percent) with DirecTV at 72 and AT&T U-verse at 71 after strong gains of 6 and 4 percent respectively. Dish Network rounds out the group up 1 percent at 70.

While most cable providers did better in 2013, all remained below the national ACSI average. Cox Communications led at 65 (up 3 percent), but is chased by a much-improved Charter Communications at 64 (up 8 percent) and a modestly stronger Comcast at 63 (up 3 percent). Time Warner Cable backslid, dropping 5 percent to an industry low of 60.

“While nearly 90 percent of households have some form of TV subscription, the industry is facing small, but growing, competition from Internet video streaming,” says ACSI director David VanAmburg. “The industry’s pattern of yearly price increases, coupled with sporadic reliability, keeps customer satisfaction low relative to other household services and vulnerable to new technologies that enter the market.”

Subscription TV customers give picture quality strong ratings for both HD and basic resolution, but find call center service to be lacking compared with most other industries.

Internet Service Providers Enter ACSI With Weak Customer Satisfaction

The ACSI’s coverage of telecommunications expanded with inaugural measures for the Internet service provider industry — a change that ensures comprehensive assessment of customer satisfaction with the video, voice and data services available to U.S. household consumers. ISPs debut with a customer satisfaction benchmark of 65 — the lowest score among 43 ACSI industries.

“High monthly bills combined with problems across a broad spectrum of customer experience benchmarks — such as service reliability, data transfer speed and video-streaming quality — leaves customers less than satisfied with their ISP service,” says Fornell. “But in a market even less competitive than subscription TV, there is little incentive for companies to improve.”

Only Verizon’s FiOS and the aggregate of all other smaller ISPs break out of the 60s with identical ACSI scores of 71. Cox beat the average at 68, followed by AT&T U-verse and Charter at 65. The low end belongs to CenturyLink at 64, Time Warner Cable at 63 and Comcast at 62.

Customers Happier As Wireless Service Improves and Smart Phones Deliver

The wireless phone industry performed an about-face in 2013, reversing a two-year trend of declining customer satisfaction with a 2.9 percent gain to an ACSI benchmark of 72. Despite matching its 10-year high, wireless service remains well below the national ACSI average.

“Barriers to switching, including contracts with cancellation fees, make the wireless industry less competitive,” says VanAmburg. “ACSI research shows that customer satisfaction is almost always lower when consumers have less choice and more headaches when it comes to switching to another seller.”

The aggregate of smaller wireless carriers easily tops the industry at 78 (up 3 percent). Verizon Wireless leads the larger carriers due to a 4 percent jump to 73, leapfrogging a stalled Sprint at 71. Nearly in line with Sprint, AT&T Mobility inched up 1 percent to 70, while the sole decliner, T-Mobile, dropped 1 percent to 68.

Much like its service counterpart, the cellular telephone category improved customer satisfaction by 2.7 percent to match its historic ACSI high at 76. With smart phones representing just over half of all phones purchased, the industry is delivering better features and more apps.

Apple dominated at a score of 81 despite a 2 percent ACSI loss. Still, compared with Apple’s PC benchmark of 86, the iPhone is not quite at the same lofty level. Samsung leapt 7 percent to 76 after launching Galaxy S III, but stayed significantly behind Apple. Nokia (up 1 percent) also earns an ACSI score of 76, while Motorola, up 5 percent to 77, created a virtual three-way tie for second place. HTC dropped 4 percent to 72 and LG fell 5 percent to 71. BlackBerry seems lodged in last place — flat at 69.

Consumers respond positively to cell phones for ease of calling and text messaging. Battery life, however, is an irritant. For wireless service, the top customer experience benchmarks go to in-store staff for courtesy and helpfulness. For reliability, the wireless industry lags its older technology counterpart, fixed lines, by receiving lower marks for call clarity, dropped calls and network coverage.

Strong Gain for Fixed-Line Phone Service Amid Shrinking Market

Customer satisfaction gains populate nearly the entire fixed-line phone business, even though customers continue to migrate toward wireless. The paradox of higher satisfaction amid dwindling usage reflects the fact that those who stay are more satisfied than those who leave. The fixed-line industry’s ACSI score increased 5.7 percent to 74, with gains for individual companies ranging from 4 to 8 percent.

The aggregate of smaller landline companies, such as Frontier and Vonage, held on to the category lead despite a 1 percent slip to 75. Among larger providers, Verizon surged 6 percent and Cox gained 4 percent to tie for the lead at 74. AT&T followed closely at 73 (up 4 percent), while digital phone provider Charter entered at 72. Large increases of 8 and 6 percent, respectively, brought CenturyLink and Comcast into a tie at 71. In its first fixed-line appearance, Time Warner Cable was last at 68.

Among the telecom industries, fixed-line benefits from quality and clarity of calls, along with the ability to keep outages to a minimum. Similar to other telecom services, however, fixed-line does not receive high marks from its customers regarding website or call center satisfaction, although it beats low-scoring ISPs on both benchmarks.

Computer Software: Deteriorating Customer Satisfaction Continues

Customer satisfaction with computer software for desktops and laptops continued to fall. This year the category’s ACSI score slipped1.3 percent to 76. Market-share leader Microsoft and the aggregate of smaller software makers both backslid 1 percent to 74 and 76, respectively. With global PC shipments having their largest quarterly drop in 20 years, the market remains thorny. Windows 8, criticized by users for its interface, has not derailed customer satisfaction for Microsoft, but it has not helped either.

The full report is available for free download at www.theACSI.org.

The Index was founded at the University of Michigan’s Ross School of Business and is produced by ACSI LLC.

The ACSI is an independent national benchmark of customer satisfaction with the quality of products and services available to household consumers in the United States. Each year, 70,000 customers are surveyed about the products and services they use the most. The data serve as inputs to an econometric model that benchmarks customer satisfaction with more than 230 companies, 43 industries and 10 economic sectors, as well as over 100 services, programs, and websites of federal government agencies.

ACSI results are strongly related to a number of essential indicators of micro and macroeconomic performance. At the micro level, companies with high levels of customer satisfaction tend to have higher earnings and stock returns relative to competitors. At the macro level, customer satisfaction has been shown to be predictive of both consumer spending and GDP growth.

View Comments
blog comments powered by Disqus