The only consumer survey that matters has found that among all businesses across every industry, Comcast and Time Warner Cable are the two most hated companies in America. The American Customer Satisfaction Index, which is put out quarterly by the University of Michigan’s Ross School of Business and is considered the most comprehensive customer satisfaction survey in the United States, has just come out with a new survey showing once again that Comcast and TWC have the lowest customer satisfaction ratings of any ISPs in the United States. And that’s not even the worst news for the two companies in the latest survey.
We asked ACSI to provide us with customer satisfaction scores for every company in every industry that they cover and it turns out that Comcast and TWC have the lowest customer satisfaction ratings of any of them.
In fact, Comcast and TWC’s Internet service businesses were the only two businesses in the United States to score below a 60 on the ACSI’s 100-point scale. What’s most amazing is that both Comcast and TWC have even lower customer satisfaction ratings than United Airlines, which has a notoriously bad reputation in an industry that, due in part to government security requirements, is known for delivering a miserable experience.
Other notable companies that had higher customer satisfaction scores than Comcast and TWC included Bank of America, perennially unpopular wireless carrier Sprint, health insurance giant Aetna and the Los Angeles Department of Water and Power. It’s unfortunate that ACSI didn’t ask how people felt about Skeletor, Gargamel and Cobra Commander, because we get the feeling that Comcast and TWC would have had lower ratings than them as well — after all, if you’re more unpopular than major airlines, health insurance companies and even monopolistic utility companies, then being more disliked than ’80s cartoon super-villains doesn’t seem like much of a stretch.
The ACSI says that the continued dismal customer satisfaction ratings of both Comcast and TWC should really make regulators think twice before signing off on a merger that would turn them into a behemoth in the American broadband and pay TV markets.
“The combination of low and downward-trending customer satisfaction for both Comcast and Time Warner Cable is cause for concern amid merger talks between the two companies,” ACSI writes. “The issue at stake is not that the proposed merger will limit competition as the service territories of the two companies do not overlap. Instead, it is the question of whether a combination of two pay-TV providers with such poor records could possibly create a better customer experience, especially given the volume of evidence from ACSI data suggesting that mergers in service industries tend to damage satisfaction — at least in the short term.”
ACSI’s full press release announcing its latest report follows below.
ACSI: Subscription TV and ISPs Plummet, Cell Phone Satisfaction Climbs
New Lows for Time Warner Cable and Comcast;AT&Tand DIRECTV Drop, but Keep Subscription TV Lead; Samsung Dethrones Apple; Verizon Excels in Wireless
ANN ARBOR, Mich., (May 20, 2014) – Subscription TV and Internet service providers (ISPs) sink to the bottom of the American Customer Satisfaction Index in its annual measure of communications industries. According to the latest ACSI results, ISPs drop 3.1% to an ACSI score of 63 on a 100-point scale, while subscription TV falls 4.4% to 65. These industries, which include many of the same companies, are the worst performing among 43 tracked by the ACSI. Meanwhile, customer satisfaction with cell phones improves 2.6% to 78 and wireless phone service remains at 72.
“The Internet has been a disruptor for many industries, and subscription TV and ISPs are no exception,” says Claes Fornell, ACSI Chairman and founder. “Over-the-top video services, like Netflix and Hulu, threaten subscription TV providers and also put pressure on ISP network infrastructure. Customers question the value proposition of both, as consumers pay for more than they need in terms of subscription TV and get less than they want in terms of Internet speeds and reliability.”
The ACSI report includes the annual measure of ISPs, subscription TV service, fixed-line and wireless telephone service, computer software and cell phones, as well as detailed findings for the top-selling smartphone brands available to U.S. consumers.
Bad Customer Satisfaction News for Subscription TV
Customer satisfaction is deteriorating for all of the largest pay TV providers. Viewers are much more dissatisfied with cable TV service than fiber optic and satellite service (60 vs. 68). Though both companies drop in customer satisfaction, DIRECTV (-4%) and AT&T (-3%) are tied for the lead with ACSI scores of 69. Verizon Communications FiOS (68) and DISH Network (67) follow. DISH Network may be the lowest-scoring satellite TV company, but it is better than the top-scoring cable company, Cox Communications (-3% to 63).
Cable giants Comcast and Time Warner Cable have the most dissatisfied customers. Comcast falls 5% to 60, while Time Warner registers the biggest loss and plunges 7% to 56, its lowest score to date.
“Comcast and Time Warner assert their proposed merger will not reduce competition because there is little overlap in their service territories,” says David VanAmburg, ACSI Director. “Still, it’s a concern whenever two poor-performing service providers combine operations. ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short term. It’s hard to see how combining two negatives will be a positive for consumers.”
Internet Service Providers at Rock Bottom Without Much Incentive to Improve
High prices, slow data transmission, and unreliable service drag satisfaction to record lows, as customers have few alternatives beyond the largest Internet service providers. Customer satisfaction with ISPs drops 3.1% to 63, the lowest score in the Index.
At an ACSI score of 71,Verizon’s FiOS Internet service continues to lead the category, surpassing AT&T, CenturyLink and the aggregate of other smaller broadband providers, all at 65. Cable-company-controlled ISPs languish at the bottom of the rankings again. Cox Communications is the best of these and stays above the industry average despite a 6% fall to 64. Customers rate Comcast (-8% to 57) and Time Warner Cable (-14% to 54) even lower for Internet service than for their TV service. In both industries, the two providers have the weakest customer satisfaction.
Samsung Emerges as New Champ in Cell Phones, Verizon Pulls Ahead in Wireless
Customer satisfaction with cell phones is up for a second straight year, rising 2.6% to a new all-time high ACSI score of 78. Steady growth in the use of smartphones, which have much higher levels of customer satisfaction, helps drive the overall industry gain. However, as data usage increases, costs to access overloaded networks are high, leaving customer satisfaction with wireless service providers stagnant at an ACSI score of 72.
While Apple still sells nearly twice the number of smartphones in the United States as its nearest competitor, Samsung now comes out on top in one critical metric— customer satisfaction. Samsung surges 7% to an ACSI score of 81, beating Apple in overall customer satisfaction for the first time. Smartphones are becoming more dominant in Samsung’s cell phone product mix, pushing its satisfaction score higher. Apple declines for the second year in a row (-2% to 79), and the field is getting tighter, with Motorola Mobility and Nokia (now Microsoft) both at 77. BlackBerry has seen its market share nearly vanish, but satisfaction climbs to 74 (+7%) for those customers that remain.
“Samsung has gone from up-and-comer to top-of-the-heap on the strength of its smartphone portfolio,” says VanAmburg. “Apple’s magic isn’t gone, but the luster has dulled on its older models. Each iteration improves on the last, but Apple’s year-long product refresh cycle is an eternity when a new Android phone seems to be released every week.”
Among wireless phone providers, Verizon Wireless separates from the pack after climbing 3% to 75. T-Mobile (69), Sprint (68) and AT&T Mobility (68) are tightly grouped behind. As smartphone adoption continues to grow, network demands increase along with costs to the consumer, each contributing to stagnant customer satisfaction.
“Consumers once used their cell phones primarily for talking, whereas now smartphones are becoming lifestyle accessories that we just can’t live without,” says Fornell. “But these powerful devices rely on networks that are still playing catch-up with consumer demand.”
Only the Most Satisfied Fixed-Line Phone Customers Remain
Customer satisfaction with fixed-line telephone service dips 1.4% to an ACSI score of 73, but remains the most satisfying of all types of telecommunications. However, the score is due to shrinking landline usage. As more households abandon fixed-line service for cell phones, the customers that remain tend to be the most satisfied.
PCs Dwindle but Microsoft Still Computer Software Giant
Computer software customer satisfaction is stable at an ACSI score of 76. Microsoft inches up 1% to 75, as does the aggregate of smaller software makers, but not enough to impact the industry as a whole. The rise of tablets and mobiles remains a challenge for traditional software makers looking to appeal to a new generation of consumers.
The full report is available for free download at http://www.theACSI.org.
