Cable Operators

Cover Story: To Win Wallets, Win Hearts First

10/10/2009 12:00 PM Eastern

Related: One Customer's Experience

 

 You could almost hear the collective groan from the cable industry when the 2009 J.D. Power and Associates U.S. Residential Television Service Satisfaction Study was released last week.

The firm's own headline, “AT&T U-verse, Verizon-FiOS and WOW! Lead Regional Customer Satisfaction Rankings Among Television-Service Providers” confirmed that cable operators generally wouldn't love the results.

Multchannel News cover, Oct. 12, 2009The survey graded the performance of cable, satellite and telco TV providers in four regions — North Central, East, West and South. The statistics reveal a gap between the cable operators and new telco TV entrants and satellite operators based on five factors to determine overall consumer satisfaction: performance and reliability; customer service; cost of service; billing; and offerings and promotions.

But on closer inspection, what the statistics don't immediately show may be more important to cable operators than what they do. For starters, not all cable operators are equal, and certainly not across all markets. Indeed, certain cable companies have outpaced the pack in their particular regions.

“Some cable operators have more work to do than others,” said J.D. Power director of telecommunications Frank Perazzini.

Moreover, nearly all cable operators showed year-to-year gains in customer satisfaction; Time Warner Cable notched a 5.8% improvement in the West, and Comcast and Charter Communications each posted 6.5% gains in the North Central, albeit on relatively smaller scores.

The problem is, telcos and satellite operators raised the bar, too: Average satisfaction nationwide in 2009, across all TV-service providers, was 632 on the 1,000-point scale, up 23 points from 609 last year.

How did just about every provider boost satisfaction? Perazzini suggested that after the poor showing in 2008 — the lowest overall scores for pay TV services in five years — everyone redoubled efforts “to better position themselves to retain and grow their customer bases.” Fewer TV customers reported outages on the 2009 survey (11% versus 15% in 2008), and providers cut hold times to resolve a customer's issue by 13% year over year.

Another factor that has surely moved the needle: There's more competition. With as many as four (or even five) providers in some markets, there's been a surge of special promotions, pricing deals, expanded HD lineups and more VOD, all intended to make television subscribers happier.

Bruce Leichtman, a market researcher and former cable-operator marketing executive, said he thought it was significant that cable's scores were up in the new survey. “To me, that's as much a story as DBS beats cable,” he said. “That [the scores are] up, not going down. And heck, as you're losing subscribers, the ones that are still with you are satisfied because they made a choice.”

In his latest Leichtman Research Group survey on the topic, published in May, 62% of cable-TV subscribers were very satisfied with their provider (satisfaction ratings of eight to 10 on a 10-point scale), while 66% of satellite TV subscribers are very satisfied with their satellite-TV provider. That's the first time the difference in the levels of satisfaction were not statistically significant, he said. (J.D. Power's 2009 survey is based on responses from 28,118 U.S. households that evaluated their cable, satellite or IPTV provider; Leichtman surveys a smaller base of 1,600 adults.)

The J.D. Power survey skews heavily toward video providers that subscribers have chosen in markets where a choice is possible, one reason why cable operators do comparatively well in phone-service satisfaction.

Cable operators and other critics of the study noted that the results also failed to discount the telephone companies' lack of service record in the survey. Even as cable operators have made great strides in customer service, there's a psychological predisposition for many people to not like the incumbent cable service. It can take years for cable companies to erase bad customer-service experiences, of which there were far more in the 1990s.

“The annual J.D. Power study isn't a completely accurate picture of consumer sentiment for a couple of reasons,” said Time Warner Cable vice president of enterprise customer care Andrew Haines. “One, there is some time lag between when the customers are surveyed and the release of the information, so we are farther along on improvements than J.D. Power is reporting. Second, consumers seem to be swayed by new technology and tend to place a higher value on new entrants than traditional providers.”

Senior executives at Mediacom Communications — which generated the lowest scores among cable operators in the J.D. Power survey — visited six regional locations last week to give awards to employees for exceptional customer-service efforts.

“Essentially, it's a week of celebration for what the front-line folks go through with customers,” said senior vice president of customer service and financial operations Tapan Dandnaik. About 60 to 70 Mediacom employees will end up being honored, he said, for efforts such as overtime put in making sure customers weren't negatively affected by a recent nationwide change to the company's telephone-provisioning system.

All companies preach customer service in advertisements, bill-stuffers and marketing programs. But these days it's more critical than ever for cable operators to perfect the art of winning loyalty.

“There is clearly a focus now that it is going to be more of a marketing game here on out,” said Miller Tabak media analyst David Joyce. “There has been a lot of investment in more customer service — call centers and training — because that's been one of the long-held beefs with the cable industry. At one time, they were the only provider, but that's not the case anymore. When you've got new entrants, you have to have good customer relations to try to retain those customers. I think that is evident in all of the cable companies improving their numbers, even if the [rankings] didn't change significantly.”

A telling detail from the J.D. Power study is that despite an overall improvement in recommendation rates, there isn't a corresponding increase in loyalty.

The percentage of cable customers affirming their loyalty to their provider declined to 25% in 2009, from 27% in 2008. Satellite providers have experienced a similar decline with a loyalty rate of 40% in 2009, down from 44% in 2008.

J.D. Power attributed this to customers who want to keep their options open in a tough economy.

To increase loyalty, the firm said in announcing the results, “Providers should continue to enhance the service improvements offered this year, and to remain competitive from a cost-and-offerings perspective.”

BEYOND THE NUMBERS
Multichannel Newsasked operators what they are doing in five key customer service areas. Here's what five top MSOs told us.

  Comcast Charter Cox Communications
What's your strategy to improve overall customer satisfaction and close the gap with competitors? Empowering employees with tools and training to fix customers' issues first time. Operational changes backed by our new Customer Guarantee that lets customers know “what they can expect from us and what we'll do if we don't live up to their expectations.” “Our goal is to provide a superior experience the first time, every time – and, if something goes wrong, acknowledge it and fix it quickly.” New, fully integrated call-center network. Hired additional care agents who were given extensive training over past two years. Voice of the Customer surveys help communicate with the customer after a phone call or in-home visit. Charter's Social Media Customer Care team can be followed on Twitter on Umatter2Charter and contacted at DSLreports.com under Umatter2Chtr. More compelling value with bundle. High performance in multiple J.D. Power categories: seventh year as highest ranked residential telephone provider in West; three-time winner in the East. Highest ranking in 2008 for residential high-speed Internet in West. Launching competitive response campaigns. Cross-platform applications such as caller ID to TV and e-mail viewer.
What are you doing to reduce outages and improve picture quality? Proactively monitoring our network and product performance 24x7 to find and fix issues before they impact customers. Comcast Whole Home Check program ensures the equipment and services in customers' homes are working properly before a technician leaves. Construction of a highly redundant national backbone. Upgrading surveillance and environmental in our headends and hub sites to eliminate outages. Deployment of tools that help identify low-level network problems and correcting them before they reach the “outage” stage. New technologies that enhance customer viewing experience. Invested in a national fiber backbone with redundant source facilities, ensuring quality HD signals. National Operations Center monitors national video delivery 24x7x365. Cross functional SWAT teams focus on top customer issues and ensure resolution.
What are you doing to improve customer service on the phone and in-person with installers? Launched a new automated diagnostic/troubleshooting portal, GrandSlam, that helps customer care agents quickly resolve issues. Launched a suite of new online databases that helps give customers consistent information for offers. Equipped 16,000 field technicians with mobile devices that help improve on-time reliability. Devices have same GrandSlam capabilities as customer care agents. New program identifies errors on work orders so they can be corrected before the technician arrives at a customer's home. Formed a specialized group that identifies the day of a service appointment as critical to customer's experience with Charter and a “highly complex interaction amongst three entities — the customer, the Charter call center and Charter Field Technicians.” Day-Of-Service team has special training to address all customer issues, including billing, support for Internet and video, billing, and repair and dispatch interactions, etc. Customers calling on day of service are routed directly to DOS team. New voice recognition replaces the previous time-intensive options. More broadly trained field service reps and call-center technical support reps; nearly 80% trained to support all products. New portals on FSR laptops provide real-time access to customer and network data. Upgraded tools ensure high signal levels, and more accurate, rapid troubleshooting. GPS in trucks ensures efficient routing and shortens service windows. Two full-time care reps monitor and respond to online media and other social networks. Two-hour service windows. Remote Home Certification allows confirmation of services after install.
What are you doing to keep your prices down/competitive? Giving customers more choice with bundled discounts. New more economical options for products and services. Providing value to customers' homes and businesses through the bundle and enhanced products, as well as improved customer service. Improving our product offerings with the addition of more video on demand and high-definition on-demand choices. Continue to offer bundling discounts and multiple service level options. Optimize internal processes to create additional efficiencies. Creative agreements with content providers to maintain highest value for customers.
Mediacom Communications Time Warner Cable
Mediacom has made technology and process changes that allow CSRs to spend more time with customers. The result has been an improvement in answering customer calls within 30 seconds, which happens more than 90% of the time. About a month ago, Mediacom added regional teams to monitor complaint calls, with follow-up procedures. “Overall, our performance year over year has been tremendous” on customer care, said Tapan Dandnaik, senior VP of customer service and financial operations. Anecdotally, he said he's heard from customers and field agents that calls are being answered faster. He also plans to set up advisory groups of customers for surveys and follow-ups. “There's a lag between when we make all these changes and the benefits that the customers realize,” he said regarding the J.D. Power survey results, which have been low for Mediacom for several years. “I'm not really sure how long that takes.” Mediacom's score in the West was up 5.6% this year, second only to Time Warner Cable (5.8%) in that region. The MSO responded to these questions with a prepared statement: “We improved our overall ranking this year, and continue to work hard to improve the customer experience. One area of focus for us is providing customers more accessibility to information, through e-mail, online chat and Web-based customer service. We have invested in our call centers, adding more resources, improving training and increasing our quality monitoring. All of these initiatives make our customers' experiences simpler and easier. “We recognize that our customers have different needs, depending on their age, lifestyle, income and a number of other factors. We've begun to address that by tailoring our products and services to better serve specific consumer needs.”

Cable's Up, But So Are Competitors

  East   North Central   South   West  
  2009 score % change 2009 score % change 2009 score % change 2009 score % change
n/a: Not rated for the region in 2008
*Highest regional score
SOURCE: J.D. Power and Associates Residential Television Service Satisfaction Studies
REGIONAL AVERAGE 635 +5.3% 625 +4.5% 635 +2.9% 632 +2.9%
Verizon FiOS 714* +5.5% 712 n/a 702 +2.0% 682 +1.3%
AT&T U-verse -- -- 715 -2.1% 718* +1.7% 721* +3.4%
DirecTV 684 +4.9% 674 +2.1% 685 +3.5% 664 +1.5%
Dish Network 669 +5.2% 650 +3.7% 654 +0.6% 664 +3.4%
Insight Communications -- -- 672 +2.6% 658 +1.7% -- --
Cablevision Systems 649 +4.7% -- -- -- -- -- --
WideOpenWest -- -- 724* +3.1% -- -- -- --
Cox Communications 644 +4.4% 652 +2.0% 641 +0.5% 646 +0.3%
Bright House Networks -- -- 618 +1.1% 674 +4.8% -- --
Time Warner Cable 622 +4.5% 605 +4.1% 612 +5.5% 616 +5.8%
Comcast 597 +5.5% 590 +6.5% 579 No change 603 +4.0%
Charter Communications 566 No change 573 +6.5% 573 +4.6% 564 No change
Mediacom Communications -- -- 555 +1.5% 560 +4.3% 565 +5.6%
October