Last Friday, a sales representative from Comcast came to our door, offering a 40% discount (he hand-wrote 40% OFF! on his business card) to switch back our cable service (from Verizon). We dropped Comcast three years ago, which the representative knew. What he didn’t know was why we left: because the service was both chronically poor and unresponsive. After rejecting his offer, I sent the sales guy on his way, to dangle the cash incentive in front of some other, perhaps more easily persuaded, household in our neighborhood.
Starting early last year, Comcast has lobbed millions of dollars into an initiative to improve service (and perception). Before turning down Comcast’s offer, I briefly explained our multiple reasons for leaving and why we weren’t interested in returning, seemingly attractive price notwithstanding. It was noteworthy that the rep didn’t try to say that anything had improved since we were Comcast customers. If the culture and level of executive commitment doesn’t change – and, at Comcast, my discussions with long-time managers there tell me that clearly the needle hasn’t moved very much – there is little chance that its reputation and image, or recovery of former customers, will improve.
Jeff Toister recently posted a blog in which all of this was nicely, and objectively, covered: http://customerthink.com/one-year-in-to-comcasts-massive-customer-service-overhaul/ As Jeff noted: “On a customer level, part of Comcast’s problem continues to be prioritizing short-term revenue over customer satisfaction” Again, this speaks to a culture where customer value is not a corporate priority.
In addition to the stats that Jeff quoted, it’s also interesting to note that, according to the 2016 Temkin Customer Service Ratings, just published last week, “Comcast, meanwhile, earned the lowest score in the Temkin Customer Service Ratings for the third straight year. Once again, the company received the two lowest scores in the Ratings, one for its TV service business and one for its Internet service….” For TV service, Time Warner Cable, Verizon, Cox, Bright House, and AT&T all had Temkin ratings twice as high as Comcast’s. There was similar 2:1 ratio in Temkin ISP rating superiority for Time Warner, Charter, and Cox. Again, this demonstrates that you can throw money and superficial performance measurement at an initiative; and, if the culture and discipline are insufficient to support goals, very little of real substance and lasting improvement will be achieved.
Being a low-cost provider means that brand, employee and customer strategies get less emphasis, and they ultimately get little commitment, in Comcast’s case despite substantial investment. A key reason companies have a difficult time achieving stronger customer loyalty, or recovering former customers, is that the fail to provide full value and emotional relationship fundamentals. They focus on satisfying customers exclusively through basic rational and functional benefits (also using metrics which give them little granular insight), which is often too benign and passive an approach to create lasting value and desired long-term relationships. I’m not necessarily singling out Comcast; but, smart marketers know that, for instance, being a low-cost provider can be a trap and that only overall perceived value will prevail.
In a 1980 Harvard Business Review article by William Hall he reported study results comparing companies that competed on differentiated customer value versus companies that competed principally on cost. On any important measure – return on equity, return on capital, and annual revenue growth – companies delivering both rational and relationship value beat the price competitors every time.
Consumers can almost always locate cheaper products or services, but the stronger motivation for selecting vendors is overall benefit. Ultimately, customers will invest a greater share of their purchase dollars, or be open to returning, with suppliers who create stronger emotional bonds and deliver superior perceived value. Competing on price, or any other single, tangible dimension, may pull away customers from other suppliers in the short run, but it will be difficult to keep them for long. Price is rarely a sufficient ‘barrier to exit’, and is more often an invitation to churn. Neither is it a lever to overcome poor prior perceived value.
Comcast could take some lessons from this; but research results (and current marketing approaches) suggest that becoming more customer-focused on a corporate cultural level is an unlikely near-term outcome. As Jeff observed: “… the focus is on media and technology, not customers. They also have a set of values that need help. One of those values is Integrity, which Comcast basically defines as not committing crimes.”