A business bromide says the customer is king. But that idea seems not to hold for the cable and satellite TV industry, where companies can rake in profits while treating customers more like serfs than royalty, according to a new University of Michigan survey released today.
Cable and satellite companies scored a 62 out of 100 on this year's University of Michigan's American Customer Satisfaction Index. That's down 1.6 percent from a year ago, and the lowest for any industry in the yearly survey of 80,000 consumers.
The airline industry had the second-lowest score at 63, a 3.1 percent decline.
Comcast Corp., which is based in Philadelphia, saw its cable TV score fall 6.7 percent to 56. DirecTV, a Comcast satellite competitor, did better with a score of 67, but that was still down 5.6 percent from a year ago.
"It's an interesting industry in the sense that it's actually one of the few where a company can do very well financially and have very unhappy customers," said Claes Fornell, director of Michigan's National Quality Research Center, which oversees the survey.
Basic cable rates rose 5 percent last year and have nearly doubled in the last decade, Fornell said. In this year's first quarter, Comcast added 75,000 new cable TV subscribers, a 49 percent increase, and posted an 80 percent rise in earnings over the previous first quarter.
The ability to raise prices while not improving service stems from limited competition, Fornell said.
Comcast and Time Warner this year divvied up customers that belonged to the failed Adelphia Communications, a temporary transition that often leads to complaints, he said.
Comcast spokeswoman Jenni Moyer said the company is striving to improve customer service. Last year, it added 4,000 customer-service representatives and technicians, bringing the total to just under 40,000, and the company plans to hire more this year.
"We're putting a tremendous amount of money and effort into improving our customers' experience with us, and we know that we need to continue to work harder to increase customer satisfaction," she said. With about 25 million cable subscribers, Comcast must manage a huge customer base, she said.
Its employees interact with customers over the phone or in person 260 million times a year, she said.
A DirecTV spokesman said the company was proud to have scored higher than competitors but said it realized: "We still have work to do . . ."
Comcast's poor performance is typical of the cable industry. Its closest rival in size, Time Warner Cable, with 13.4 million subscribers, earned a score of 58 in the Michigan survey, a decline of almost 5 percent.
The survey did not rate TV services provided by phone companies such as Verizon Communications Inc. because their market share is too small.
But for the second year, the survey compared phone services offered by cable companies, which have recently started competing in that business.
Comcast's phone-service rating fell 2.9 percent to 67. Verizon's score improved this year, to 72, a 4.3 percent increase. Verizon spokesman Mark Marchand chalked up the improvement to continuing technology investment.
Fornell speculated that the bundles of phone, internet and TV service that Comcast and others began offering about a year ago at an introductory rate of $100 monthly may have reduced satisfaction when customers realize that an outage potentially means losing phone, TV and Internet.
Karen Jefferies of Middletown Township, Delaware County, said she experienced frequent outages of her Comcast phone service for several months last year.
"It was like living in a Third World country," she said. Customer service representatives were never familiar with her problem despite previous calls and service visits. Eventually, the problem disappeared.
Molly Schanz, director of Comcast's call center in Northeast Philadelphia, said customer-service representatives should be able to find information about past calls. The company has added a second screen at every station so that they can look up information more easily.
Schanz, who has worked for Comcast for 19 years, has managed to turn disgruntled customers into happy ones.
Carla Zambelli of Lower Merion found Schanz through the township after experiencing several difficulties with Comcast, including missed appointments.
She said Schanz quickly fixed problems.
"Molly is a paradigm when it comes to customer service," Zambelli said, "and she's really super-nice, and I think through her, things have gotten better."