Unhappy Customer More Likely to Switch Carriers - Report

The percentage of wireless users who say they will switch service providers nearly quadruples among those who rate their carrier below average in customer care, according to the J.D. Power and Associates 2003 Wireless Customer Care Performance Study. The inaugural study provides a detailed report card of wireless customer care performance, based on customer experiences with both the service representative and automated response system (ARS).

The study indicates that among those whose satisfaction with the most recent customer care transaction is below average, 26% report they are "definitely" or "probably" likely to switch from their current carrier in the next year -- almost four times higher than for those who rate their customer care experience above average (7%).

Minimizing the number of contacts needed to resolve an issue and reducing the amount of time on hold prior to speaking with a service representative are keys to a successful customer care transaction. About one-third of those who said they waited 20 minutes or more on hold indicate they will "definitely" or "probably" switch providers. Switching probability drops to 12% for those who waited less than 2 minutes.

"It currently costs wireless providers between US$300 and US$425 to acquire each new customer, so the ability to retain existing subscribers is increasingly crucial in this industry," said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. "Wireless providers shouldn't underestimate the influence the customer care experience can have on retaining customers. In most cases, this is the only time carriers have an opportunity for personal contact with customers, and a good customer care experience can actually raise satisfaction levels and increase future loyalty above the level it was before the call to customer service."

The study utilizes a customer care index based on four key areas that impact overall carrier performance. These are (in order of importance): service representative interaction (44%); resolution contact frequency (31%); ARS processing/navigation (13%); and hold time duration (12%).

Nextel and Verizon Wireless rank highest in a tie in customer care performance among the seven largest wireless service providers. Nextel performs particularly well in the ARS area, specifically in navigation as it relates to instructions/prompts, while Verizon Wireless consistently performs above the industry average in all areas, particularly in having service representatives who understand customer issues and in shorter hold times.

The 2003 Wireless Customer Care Study is based on experiences reported by 16,800 wireless users."

Posted to the site on 29th August 2003