Voice Customers Give Cable a Mulligan While justifiably proud of its high marks in the recent J.D. Power and Associates Customer Service Rankings for Local and Long Distance Telephone Service, the cable industry should probably understand that its been given a mulligan – for nongolfers, that’s a do-over – when it comes to customer service. At least that’s the gist of what customers were saying – compared to what cable used to get when it came to video service. Also evident in the report: Technology is nice, but other factors are more important to consumers in the long run. Cox Communications got the highest voice service customer satisfaction rankings in the Northeast, Southwest and West regions; Bright House Networks topped the Southeast; and Time Warner Cable was boss of the North Central. Verizon Communications was the only traditional phone company to crack the list by getting the top ranking in the Mid-Atlantic Region where there was "a pretty tight battle," said Steve Kirkeby, executive director-telecommunications and technology research at J.D. Power who said Verizon was "over the top of AT&T, Cox and Comcast and Sprint." Comcast, apparently still getting its voice legs, was shut out in its own headquarters backyard, being "about average overall in terms of where they place. I would put them in a solid average," Kirkeby said. Helping cable’s image High customer satisfaction ratings for voice are helping the cable industry’s image overall after years of customer dissatisfaction with the way it handles its bread-and-butter video entertainment business, Kirkeby said. "The satisfaction with video service has slowly inched up over time. If you start at the bottom, the only direction is up," he said, noting that cable – despite its army of story spinning naysayers – had pretty much lived in the customer satisfaction basement with video. "We just never envisioned satisfaction getting worse." Two primary factors came into play in the voice rankings. First, cable was competing against telephone companies that have, over 100 years, defined the term "arrogant" when dealing with voice customers; in other words, cable was coming in with a smile where a frown had been the norm. Second and most importantly, Kirkeby said, "Cable companies are being seen as providing a bloc of products and services that customers want, that they like. With this bundling phenomenon, cable companies make it simple … at a better price. It’s raising all boats." It’s not the voice technology that leads directly to customer satisfaction – although without good quality equipment the rest would be just conjecture – it’s a combination of factors. Bundle up "In terms of cable companies and satisfaction, there are two things," said Kirkeby. "No. 1 is bundling, the fact that they’re offering the triple play, and No. 2 that they’re offering it at a competitive price." People bundle services for "convenience, price and simplicity or a single bill. At the end of the day it’s a value proposition," he said. The better the value, the more satisfaction. Even in this silver lining, there’s a dark cloud for cable. Video is sliding down the list of what customers perceive to be part of the bundle’s value, and that may be because telephone companies aren’t yet offering video. "It’s voice, data and video in that order in terms of what customers are looking at," said Kirkeby. "This year we saw data move up as a No. 2 because it’s a more aggressively promoted second product. It actually beats out video as the second most commonly seen product in the pecking order." Wireless ho hum As for the quadruple play, "customers like to see wireless as part of the bundle, but it’s really a lot lower incidence than you’d expect," said Kirkeby. Video might be dropping because phone companies really aren’t in the entertainment business yet, despite their partnerships with DISH Network and DirecTV and their talk of rolling out digital TV. "We see the local telephone company as historically the No. 1 option. Folks see that as their most logical bundling partner," Kirkeby said, pointing to a "rock steady" statistic that 35 percent of respondents said the phone company was most likely to provide the ideal bundle while 26 percent – up from 19 a year ago – favored cable. Pulling no punches, it’s easier for cable to compete in the voice arena because the industry enters without baggage. People have had years of dealing with the phone companies, and they’re ready for something newer, cheaper and more feature-loaded. Conversely, cable’s continuing video satisfaction slump may lead to similar statistics if the telcos ever get their act together and move seriously into the video arena. "It’s a wild and woolly race out there," said Kirkeby. – Jim Barthold

The Daily

Subscribe

People

AMC Networks tapped Christina Spade to serve as evp/CFO. She succeeds Sean Sullivan , who stepped down

Read the Full Issue
The Skinny is delivered on Tuesday and focuses on the cable profession. You'll stay in the know on the headlines, topics and special issues you value most. Sign Up