Customer Satisfaction With Electronic Services

The annual report on the information industry sector from the American Customer Satisfaction Index (ACSI) 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 (ISPs), subscription television service, cellular telephones, fixed-line telephone service, and computer software—climbed 0.6 percent to 72.3 on a 0–100 scale. The improvement, along with gains for energy utilities and healthcare (reported by ACSI in April), pushes 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,” says Claes Fornell, ACSI’s 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 stagnate customer satisfaction with a 3.0-percent gain to an ACSI benchmark of 68. Although 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 earned the best marks for customer satisfaction. On average, fiber-optic/satellite service received an ACSI score of 72 compared with 63 for cable service. Verizon (FiOS) stayed in first place at 73 (–1%), with DIRECTV at 72 and AT&T (U-verse) at 71, close behind after strong gains of 6 percent and 4 percent, respectively. DISH Network rounded out the above-average group with a near-steady benchmark of 70 (+1%).

Although most cable providers are doing better in 2013, all remain below the national ACSI average. Cox Communications led at 65 (+3%), but is chased by a much-improved Charter Communications at 64 (+8%) and a modestly stronger Comcast at 63 (+3%). 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 gave picture quality strong ratings for both HD and basic resolution, but found 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 ISP industry—a change that ensures comprehensive assessment of customer satisfaction with the video, voice, and data services available to U.S. household consumers. ISPs debuted 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 broke 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 performd 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 topped the industry at 78 (+3%). Verizon Wireless led 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 leaped 7 percent to 76 after launching Galaxy S III, but stayed significantly behind Apple. Nokia (+1%) also earned an ACSI score of 76, and 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 responded 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 lagged 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 continued 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 percent to 8 percent.

The aggregate of smaller land-line 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 (+4%), and digital phone provider Charter entered at 72. Large increases of 8 percent and 6 percent, respectively, brought CenturyLink and Comcast into a tie at 71. In its first fixed-line appearance, Time Warner Cable fell short at 68.

Among the telecom industries, fixed-line benefited from quality and clarity of calls, along with the ability to keep outages to a minimum. Similar to other telecom services, however, fixed-line did not receive high marks from its customers regarding website or call-center satisfaction, although it beat 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 slipped 1.3 percent to 76. Market-share leader Microsoft and the aggregate of smaller software makers 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.

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