JD Power study finds sweep for cable across six U.S. regions
Cable companies lead customer satisfaction ranking for U.S. telephone service.
Cable companies lead the customer satisfaction rankings for telephone service in six U.S. regions for the first time, according to J.D. Power and Associates.
According to the firm’s 2007 Residential Regional Telephone Customer Satisfaction Study released this week, cable companies offering bundled service package are proving to be tough competition for traditional telephone providers. The study finds that 86% of cable-based voice subscribers also subscribe to data services from the same provider — an increase from 71% in 2006.
Conversely, 36% of telecom-based voice subscribers also use their provider to fulfill their data needs, which is an increase of 7 percentage points over 2006. The impact of bundling is further evidenced by the boost in importance weight of the offerings and promotions factor, which has increased by 3% since the 2006 study, J.D. Power notes.
“Customers increasingly want multiple services and products bundled into one convenient package under a single provider, and cable companies are doing a great job of achieving this with their voice, data and video packages,” says Steve Kirkeby, executive director of telecommunications and technology research at J.D. Power. “Even still, local and long-distance phone services remain the most widely accepted services to bundle, with data and video steadily closing the gap over the past three years. While rolling out their video service offerings, telephone companies can improve their near-term competitiveness by either lowering prices on their core products or perhaps even adding wireless service to their bundle options, as some have already done.”
The 2007 Residential Regional Telephone Customer Satisfaction Study is based on responses collected from April to May 2007 from 11,911 customers nationwide who receive their local and long-distance telephone service from one provider. It measures customer satisfaction with both local and long distance telephone service in six regions across the United States.
Six factors are examined in determining overall satisfaction: performance and reliability, customer service, billing, image, cost of service, and offerings and promotions.
The study also found that 43% of customers report that they are loyal to their voice provider — an increase from 41% in 2006. However, among the 12% of subscribers who “definitely” or “probably” intend to switch providers, the most frequently cited reasons for doing so include competitive/discounted pricing, convenience and receiving a single bill.
“It seems as though most subscribers are becoming more loyal, with 36% of those who currently bundle reporting they would add even more products or services from their current provider, making the next several years crucial for both telephone and cable companies,” Kirkeby says. “Increased loyalty and the relatively stable switching intentions observed over the past few years will make it increasingly difficult to gain market share through product offerings alone.”
The study results by region are:
* Northeast — Cox Communications ranks highest in the region for a second consecutive year, receiving top ratings from customers in performance and reliability, billing, image and customer service.
* Mid-Atlantic — Cablevision ranks highest, performing particularly well in all six factors of overall satisfaction.
* Southeast — Bright House Networks ranks highest in the region for a second consecutive year, performing particularly well in customer service, billing, image, cost of service, and offerings and promotions.
* North Central — WideOpenWest leads the region, receiving highest ratings from customers in all six factors of overall satisfaction.
* Southwest — Cox Communications ranks highest for a second consecutive year, receiving particularly high ratings in all factors of overall satisfaction.
* West Region — For a fifth consecutive year, Cox Communications ranks highest in the region, performing particularly well in billing, image, and performance and reliability.
