Better bundles and more aggressive pricing are cited as major reasons for improvement in a new J.D. Power study.
Posted Apr 24, 2006
Overall customer satisfaction with wireless service providers has increased significantly from 2005 as customers react to new service offerings and aggressive pricing strategies, according to the J.D. Power and Associates "2006 U.S. Wireless Regional Customer Satisfaction Index Study." The study measures customer satisfaction based on 42 specific service-related measures grouped into six key factors that impact overall wireless carrier performance.
Survey ratings were based, in order of importance, on: call performance and reliability (26 percent); customer service (17 percent); service plan options (17 percent); brand image (14 percent); cost of service (14 percent); and billing (12 percent). Carriers are ranked across six regions in the United States: Northeast, Mid-Atlantic, Southeast, North Central, Southwest and West.
Over the past three years overall satisfaction has fluctuated significantly as changes in the industry, such as recent carrier mergers, have influenced the customer experience. The study found satisfaction has improved 3 percent from 2005, with particular improvements in the areas where the industry has been aggressively marketing new services and offering more attractive pricing options. For example, the service plan options and cost of service factors received the largest increase in satisfaction ratings from 2005.
"Customer satisfaction is increasing," says Jeff Kagan, an independent telecommunications analyst. "Earlier, the carriers were focused on signing up new customers and were not as concerned with reducing churn. As we approached 200 million users the carriers realized during the last few years that it is just as important to keep customers by keeping customers happy. So they all started focusing on reducing churn, and it has been successful so far."
"It's encouraging to see that industry-wide service improvements, especially expanded service offerings and aggressive service plan pricing, have resulted in more positive overall wireless service experiences," says Kirk Parsons, J.D. Power and Associates senior director of wireless services. "However, consumer expectations will continue to rise as cell phone users increasingly rely on the communication functions of their cell phones beyond voice calling."
It's more than just offering customers more services in an attempt to reduce churn, Kagan says. "Telecom as an industry is going through an enormous change. We are seeing the local phone companies and the cable television companies gearing up to offer the same big bundle of services. Yesterday, we did business with both the phone company and the cable television company. But tomorrow we will be able to choose one and say goodbye to the other--that all or nothing philosophy will be much different. Each side may have half the customers they have today, but those customers will buy the big bundle of telephone, television, Internet, and wireless services. Today both sides are rushing to put their big bundle together."
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