Customers Increasingly Disappointed with Mobile Phone Retailers

Overall customer satisfaction with the wireless retail sales experience has steadily decreased since 2006, driven in large part by dissatisfaction with salespeople, according to a J.D. Power and Associates Study.

Now in its fourth year, the semi-annual study analyzes evaluations from customers who recently had a wireless retail sales purchase experience. Overall customer satisfaction with major wireless carrier-branded stores is based on four factors. In order of importance, they are: sales staff (51%); store display (17%); store facility (16%); and price/promotion (16%). The study finds that overall satisfaction with the wireless retail sales experience has declined to 709 points on a 1,000-point scale-down 7 points since the last reporting period (Volume 1 released in May 2007) and down 12 points from a year ago.

"Since the study's inception, overall wireless performance has generally trended downward based on a number of industry changes, such as the increase in new products and services, and the expansion of competitive retail sale channels," said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. "These forces have made it difficult for carriers to meet customer expectations as wireless service gains mass appeal."

In addition, all four factors driving overall satisfaction experience a decline, with the most notable drop in the sales staff factor.

"At the industry level, big-box retailers also have a fairly large hand in the overall decline, as customers visiting these outlets report particularly low satisfaction levels with the sales process," said Parsons. "The information and expertise that the sales staff provides is key in distinguishing wireless carriers that meet and exceed customer expectations from those that do not. Also, as providers match each other on price, retail outlets that provide the necessary product information and take the time to explain all the service options available will generate significantly higher satisfaction scores and, more importantly, increase the likelihood of repeat purchases."

Verizon Wireless ranks highest in customer satisfaction among major wireless carrier-owned retail stores, performing particularly well in store facility, store display and price/promotion. T-Mobile closely follows Verizon Wireless in the rankings.

When it comes to loyalty, customers who say they are "delighted" with the sales process are more than seven times more likely to visit the same retail store again for future purchases, compared with customers who are not as pleased. Additionally, the likelihood of recommending a store to friends and neighbors is nine times higher among delighted customers compared with those who have low satisfaction. Enhancing customer satisfaction and increasing loyalty levels can translate into significant additional revenue for wireless carriers.

The study also finds the following key retail wireless sales transaction patterns:

• The average wireless retail sales transaction takes approximately 1 hour to complete from the time the customer enters the store to the time the final paperwork is finished and the cell phone is received. This is an increase of nearly 4 minutes from the last reporting period.
• Among customers who visited a retail store in the past six months, more than 60 percent did so to purchase a new cell phone, while 62 percent upgraded or replaced an existing phone. Additionally, 15 percent of customers visited the wireless retail store for the first time.
• Retail satisfaction is 18 percent lower among customers who report they were pressured during the sales process. The average overall satisfaction rating among customers who report experiencing no sales pressure is 736 on a 1,000-point scale, compared with just 607 among those who say they were pressured.

Volume 2 of the 2007 Wireless Retail Sales Satisfaction Study is based on experiences reported by 6,311 wireless customers who completed a retail sales transaction within the past six months.

Posted to the site on 25th October 2007