Cable Operators

Closing the Power Gap

1/09/2005 7:00 PM Eastern

Nearly every summer for the last eight years, cable companies have received disappointing news: they're getting beat by their direct-broadcast satellite rivals in the customer satisfaction department.

Since 1996, when consumer research firm J.D. Power and Associates began surveying thousands of customers of cable and DBS providers, DirecTV Inc. and EchoStar Communications Corp.'s Dish Network annually have risen to the top, trading the No. 1 spot back and forth every year except 2001, when Ameritech New Media took top honors.

In the latest edition of J.D. Power's Residential Cable/Satellite TV Customer Satisfaction survey, Dish reclaimed the top spot for overall customer satisfaction, a feat it last achieved in 2000.

Grading Satisfaction
Customer satisfaction index scores (based on 1,000-point scale)
Provider Index 2004 Rank 2003 Rank 2004
Dish 725 1 2
DirecTV 721 2 1
WideOpenWest 715 3 4
Cox 698 4 3
RCN 671 5 6
Bright House 670 6 n/a
Industry Average 664
Time Warner Cable 656 7 7
Comcast 633 8 11
Insight 632 9 8
Mediacom 626 10 9
Adelphia 617 11 13
Cablevision 617 12 12
Charter 617 13 10
Source: J.D. Power and Associates 2004 Residential Cable/Satellite TV Customer Satisfaction Study

Is that evidence that cable's customer service pales compared to the satellite rivals? Not entirely, according to a closer reading of the charts.

“At the end of the day, what's really making a difference is the value proposition. It's the cost of service,” says Steve Kirkeby, senior director of telecommunications for J.D. Power, who heads the company's cable and satellite survey. Although customer service is the biggest single contributor to overall satisfaction, he says the perception of lower costs associated with satellite TV service also weighs heavily in calculating higher overall satisfaction scores. Within J.D. Power's six-point evaluation scale, only one cable operator, New Jersey-based RCN Corp., scored higher than three points in the cost-of-service category. Both satellite providers earned five-point scores on the cost scale.

The J.D. Power survey is sometimes misconstrued as a gauge purely of customer service practices and perceptions, says Kirkeby. In fact, the study blends six different satisfaction metrics to come up with a combined score: performance and reliability, cost of service, billing, image, offerings and promotions, and customer service.

WOW'S BIG WOW

On the customer-service metric alone, one cable company equaled DirecTV and Dish for the top score in 2004. Denver-based WideOpenWest LLC — which delivers video, telephone and high-speed Internet service in Illinois, Michigan and Ohio — scored highest of all cable providers in the customer-service area, earning the maximum five points.

If WOW possesses a secret for delivering terrific service, it's not telling. “There's really no magic silver bullet here,” says Mike Furst, senior vice president of customer care. “There are a lot of things that go into it.”

Furst credits a team approach that's inspired by a highly visible senior management focus on customer service. Top executives spend at least one hour a month with customer-service representatives, listening to inquiries and scribbling notes about service requests and complaints.

Another contributing factor: arming customers with information they can use to help solve problems or answer questions on their own. Furst is a big believer in empowering customers with useful information through vehicles like monthly bill inserts and a detailed customer Web site.

That helps reduce call volume and keep customers happier. But when they do call, Furst says it's important to be prepared to resolve requests within a single phone conversation — and to be able to answer the call quickly in the first place.

“When I first got here, it wasn't uncommon for us to have average hold times of five minutes,” says Furst. “That was completely unacceptable.” Among his first moves was to increase staffing to align better with call volume. Furst says agents now answer nearly all calls within 30 seconds. When volume hits peak levels, the company routes overflow calls to an outsourcing facility.

WOW isn't alone in making efforts to arm customers with self-service resources. Cox Communications Inc., which surpasses the J.D. Power average for customer satisfaction, has invested in a souped-up telephone automation system that helps customers quickly resolve problems with high-speed Internet connectivity and other service issues.

By speaking into an automated interactive voice-response system (IVR), customers can trigger an evaluation that tests their Internet connection and offers a quick diagnosis, according to vice president of customer care Debbie Siek. In addition to the speech-based IVR, Cox is giving customers additional avenues to get help. Company service agents respond to most e-mail queries within 24 hours. And a live, online “chat” service lets customers resolve service issues without even picking up the phone.

Whether cable investments in enhanced-service technologies will be enough to unseat DBS in customer satisfaction isn't certain. But there are signs that the gap is narrowing. From 2003 to 2004, collective cable-satisfaction scores measured by the J.D. Power survey improved 3.1%, vs. 1.6% for DBS.

SATELLITE IMPROVEMENTS

Not that the satellite providers are standing still. DirecTV and Dish have also upgraded their service infrastructures as their combined customer base has grown to exceed 24 million U.S. households. DirecTV opened two new call centers in 2004, and Dish has gone on a hiring binge, adding more than 6,000 employees over the last 18 months, with the majority involved in service and installations.

Dish also opened two new call centers in 2004, raising its total number of call centers to nine. Employing 100 or more agents each, the call centers are routinely festooned with balloons, posters and merchandise relating to sales and service contests, says Dish spokesperson Kelley Baca.

A similar party ethic prevails among cable-call centers, where contests are designed to keep morale up. “We constantly do contests,” says Kate Welton, call center director for Adelphia Communications Corp. in Buffalo, N.Y.

As cable's panoply of services has grown to include complicated telephone, data and digital video offerings, the skills and dexterity demanded of service agents have also broadened. So has the need to hire the right people.

“The industry itself is really relying heavily now on a lot more pre-hiring skill assessments,” says Welton. “Clearly you want phone skills. You need basic-computer skills. But the problem-solving and behavior issues are a little harder to nail down.”

September