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Comcast Customer Service Ranked as Abysmal. Effect on Revenue?

Robert Bacal | Sep 14, 2010 515 views 5 Comments

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It’s time to stop making assumptions about customer service and its effects on business, and start using data to drive business decisions.

Just watched the boys and girls at the #custserv chat pretend they know what CEO’s should do about customer service. Each week it gets more entertaining as these folks, none of whom are senior corporate officers demonstrate both their arrogance and judging abilities by “advising” imaginary CEO’s, or more to the point, blaming them. More on that at a later time.

Clearly these folks assume that poor customer service means loss of customers and then slow slides into corporate oblivion, and while that’s an assumption that’s shared by a lot of people, it’s more hope than reality. In fact many of the companies ranked lowest on customer service are and continue to be immensely profitable. I know that’s something members of The Church of the Infinite Customer want to ignore, and perhaps if one has no business sense, it’s easier. But reality is reality, and no amount of hope from Church/Chat members changes the fact.

So, we’ll highlight some of the companies “crippled” by poor customer service. First up. Comcast.

Comcast is a telecommunication firm that has been consistently rated at the bottom in terms of customer service quality. Although they haven’t managed to secure the worst position, over the last four years they come in just about second worst.



How terribly have they done?

Well, here are some financials related to this company suffering immensely as customers leave in droves and drive them out of business. (Numbers from Wikipedia from 2009)

Over the past ten years (to 2009), Comcast has achieved a financial record that is, according to one analyst, “not unimpressive”. The book value of the company nearly doubled from $8.19 a share in 1999 to $15 a share in 2009. Revenues grew sixfold from 1999’s $6 billion to almost $36 billion in 2009. Net profit margin rose from 4.2% in 1999 to 8.4% in 2009, with operating margins improving 31 percent and return on equity doubling to 6.7 percent in the same time span. Between 1999 and 2009, return on capital nearly tripled to 7 percent

Hmmm. Just squeaking by. Now certainly, it’s possible Comcast has lost billions as a result of being seen as offering terrible customer service. Since we don’t know that and can’t claim something for which we have no direct evidence, it certainly looks like despite the perceived poor service, Comcast is alive and well, financially, putting the lie to the assumption that poor customer service perceptions and poor financial results are linked together inextricably.

How can that be? Well, first of all, they have lots of company. Stay tuned for more instances of this effect. Second, it’s an unproved assumption that there is a direct link between service quality and business success. In fact, the causes of business success are so varied and complex we couldn’t demonstrate causal relationships even if we wanted.

Third, this just shouldn’t be that surprising to people who live in reality, not some imaginary world. No Frills establishments have flourished by offering really poor customer service and giving the impression of cost savings. Warehouse type places have lousy customer environments, long lines often, and one of the GranDaddies, Costco, even charges to allow you the privelege of shopping in a warehouse setting. Most of us shop at places that offer poor service because it’s more convenient or we think we get deals, or for other reasons.

For that reason it’s not terribly surprising that many companies ranked badly in service, do very very will financially. Stay tuned for more, and some excerpts form the fanatics from the Church of The Saintly Customer.

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5 Responses to Comcast Customer Service Ranked as Abysmal. Effect on Revenue?

  1. Robert Doner September 15, 2010 at 5:55 pm (2 comments) #

    Top 10 Companies With the Most Customer Service Complaints on Twitter: AT&T Worst, Apple Sixth
    We analyzed thousands of customer service complaints on Twitter (from 13 Aug 2010 to 16 Aug 2010), to find out which corporations caused the most frustration.

    Data was first collected from the Twitter Search API, using a search for “customer service” together with any one of: fail, sucks,worst, poor, bad, terrible or awful. Tweets that included links were filtered out, as were re-tweets, to maximize the likelihood of personal experiences and reduce tweets about articles or stories (e.g. Jet Blue, Santander and O2 customer service stories were prevalent over the survey period).

    The extracted tweets were placed into an Excel spreadsheet and manually verified over the course of a day, to check the validity of the complaints (i.e. to ensure that tweets like “I’ve never received bad customer service from X” weren’t included), and to extract the correct names of corporations (i.e. some people use the full company name, others use Twitter usernames, hash-tags, or abbreviations). Where described in the tweet, we also recorded the cause of the frustration, e.g. slow service or rudeness. http://www.groubal.com/top-10-customer-service-complaints-twitter/

  2. Robert Bacal September 15, 2010 at 7:31 pm (143 comments) #

    Thanks for posting the above. I read it elsewhere, and I think its great that people are doing this. I’m not sure exactly what your point was about this.

    Now what I’d really like to see is the number of people who say the companies they use have lousy customer service but they still …er give them the business. I bet most “experts” would be surprised.[img_assist|nid=244318|title=winfourcustomerservice|desc=|link=none|align=left|width=100|height=34]

  3. Mark Freder December 15, 2010 at 11:47 pm (1 comment) #

    Comcast can afford to have poor customer service because of their relative monopoly in many of their market areas. Case in point, the City of Seattle inked a deal effectively giving Comcast dominance and pushing out Verizon. Result: Comcast cheerfully ignored customer frustration until it became too much and started affecting their brand.

    Did it affect profits? No, but Comcast saw a correlation between keeping customers happy and future success. Probably because Comcast was concerned that unhappy customers would begin to take a second look at their monopoly agreements with city governments.

  4. fettman24 January 22, 2011 at 12:32 pm (1 comment) #

    Unfortunately I don’t believe that this will affect Comcast revenue, being that it is such a huge company. As a DISH employee and satisfied customer, I stand by the customer service with DISH Network. They have beaten Comcast in rankings for the last 10 straight years, and that is no easy feat. Not to mention being treated more fairly with DISH you can also pay less as them being the lowest all digital price in America every day.

  5. Robert Bacal January 26, 2011 at 9:11 pm (143 comments) #

    My point, though is not really about Comcast but about the people who make silly claims based on unsubstantiated assumptions about customer behavior. If you look at the worst ten companies ranked on customer service, you will find that ALL of them are doing quite well, thank you, financially.

    Social media hasn’t made a difference, and the reason is customer behavior is not very much effected by quality of service ON ITS OWN. Customers make decisions about where to buy based on many many factors, and that’s why the companies with “horrible” customer service continue to thrive.

    It’s great to think that we’ll get better customer service because of the “power” of customers, but it’s just plain malarky.

    It’s good business to provide just enough customer service compared to great customer service for most companies.

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