In the Temkin Group’s 2015 Experience Ratings Industry Snapshots, Internet Service Providers were ranked last out of 20 different industries. It’s no surprise; few people love their cable or phone provider, and among the least beloved is Comcast.
Comcast announced recently that it will be putting a massive effort behind changing its customer service. The announcement will come as welcome news to many Comcast customers. In the last few years, Comcast has become the poster child for terrible customer service provided by a faceless corporation with captive customers. Its poor customer service ratings have been magnified and made archetype by a succession of viral customer service stories like this one about a recorded call with a Comcast phone rep and this one a few months later.
Comcast, like its fellow cable providers, has enjoyed a coveted market position: it could give bad customer service and still remain highly profitable. Each industry is different, but oligopolistic firms who are absent competitive pressure and that have customers who are captive or have significant switching costs can get away with poor customer service–in the short term.
In fact, the succession of bad customer service stories seems to have impacted governmental attitudes towards Comcast’s now abandoned move to acquire Time Warner Cable, a consolidation that would have given the new company control over half the United States broadband market. How big a factor this was in the government’s decision to slow-kill the deal is questionable, but the commentary around the event showed that people intuitively understood that an even larger organization with less competition would have almost no reason to provide good customer service.
Does Cable Need Saving?
In many industries in which there has been mass consolidation or which have historically been subject to a few dominant players–banking and mobile phone providers, to name a couple—technology is changing the status quo. The same is true of cable.
In the past few years, Hulu, Netflix, and Amazon have already begun chipping away at the programming side. Satellite has had its impact on the transmission side. Cable companies are seeing their competitive advantage reduced to controlling the cable itself, and little else.
But how long before that is at risk? How long before someone figures out a wireless or other technology that makes cable the old tech? The challenge with captive customers that are treated like captive customers is that, when afforded the opportunity, they tend to escape captivity as quickly as they can.
Why Cable Needs Great Customer Service
Cable providers will need to do two major things to survive in the long run: adapt to technological changes and provide great customer experiences.
Cable companies are technology companies. They must be constantly focused on innovating their products, staying ahead of technological change, and keeping prices competitive. One only need to look at Blockbuster and Netflix for what happens when these principles are ignored.
Yet, cable companies must dedicate themselves to a customer-centric approach–one that creates a customer base that is happy, that sees no reason to switch. Because try as they might to lead technologically, there is no guarantee that broadband providers will be the ones at the forefront of every change. A loyal customer base is the best protection.
Every customer base will have its non-loyal component. Those that will switch to save a dime a month or because the technology didn’t work for five minutes one day; it is when most of your customer base would rather be somewhere else that you are in danger.
If I led a cable company in the year 2015, I would do everything I could to become not only the service leader in my industry but a service leader across industries.
I would make sure that doing business with my company was such a pleasure that when competitive pressures from rapidly shifting technology arose, my customers would have no incentive to switch.
Cable company leaders must invest in a customer-centric culture. They must sacrifice a few quarterly earnings reports for the benefits of long term sustainable advantage. It is not easy to do, but it must be done. Comcast is taking the first step.
While many will criticize the path Comcast took to get to this point, I applaud Comcast’s new effort. If it works, it will benefit both customers and, in the long run, investors. In the end, whether it’s Comcast, Time Warner, or another company, I think that customer service can truly save cable.
Next week we will take a look at changing a customer service culture–and how hard it is.
A well done piece. It is clearly customer service that will change Comcast and other cable companies. However, one has to wonder, given the onslaught of competitive technologies and the long-term requirement for sustainable change in entrenched cultures, if there is enough time for a turnaround before the cable companies go the way of the video rental stores. As you listen to the tone and style of the call center operator on the free tech call that got charged, you hear her intense bias and persistence to save the dollar over save the customer. Customers may not be always right, but they are always the customer. And, as Wal-Mart founder Sam Walton was fond of saying, “they can fire everyone from the CEO on down just by spending their money somewhere else.”
A ‘monopoly” stance often causes greater customer ire than normal shot point blank at the frontline leading to burnout and turnover, often of the best talent. It also creates a greater likelihood for customer sabotage and/or trashing the company to the masses on social media. And as soon as an alternative is available you witness a super-hasty exit by frustrated customers.
Cable company culture change will require the deepest commitment and involvement from the C-suite. That commitment is manifested in a sober recognition of a burning platform, the willingness to invest heavily in the culture change, and the requirement to bring major overhaul to a performance management process that holds leaders accountable for great customer service, not just revenue generation. Let’s hope the industry has the courage and patience to get there from here.
Let me suggest that overhauling Comcast’s customer service operation, principally by hiring more customer support staff with the same training and attitudes, will mean little for stakeholders, i.e. a band-aid trying to do the work of major surgery, without a parallel and similar strategic initiative, and corporate support, aimed at overhauling the enterprise’s passive, profit-obsessed, non customer-centric culture:
http://www.targetmarketingmag.com/blog/comcast-is-too-big-fail-but-not-too-big-suck
http://customerthink.com/how-customer-centricity-creates-bondingand-rejection-and-anger-yes-boys-and-girls-culture-matters/
Comcast recently posted an ad for a Vice President of Customer Experience; but, within days, the posting was removed and the position cancelled. So much for commitment. Apologies are superficial and passive. Arrogance is strategic and organic. If an organization doesn’t make customer focus, and even customer obsession, a core element of its DNA and culture, then hiring more customer service agents is a grossly insufficient solution.
From my perspective, cable doesn’t need ‘saving’, per se. It needs more proactive approaches to customer experience, more transparency, and authenticity and a more customer-centric culture and set of attitudes.
Hi Adam – this post resonates very well with me – their are many similarities with the Telecoms sector in the UK. In a way, I think that consumers see similarities between this and other industries where ‘switching’ suppliers is a ‘hassle’ not worth contemplating – banks and energy companies being the two most prominent. The thing that all of these industries share in common is that their focus in recent history has not been on the customer. Whilst some may consider this to be a generalisation, I think it is difficult to argue that ‘big business’ has been far more interested in shareholder return (shareholder centricity) than they have in delivering continuously improving customer experiences (customer centric). One is a short term strategy, the other a long term one.
The result is that the majority of businesses in these sectors are very similar – similarly poor, random and unintentional. That leads to apathy – with employees and as importantly with customers. When dissatisfied customers ‘do not see the point’ in switching because everyone is as bad as each other, there is a big issue…….or is there?! The sensible, switched on, progressive, innovative, and customer centric organisation will see this as a HUGE opportunity – an industry changing one. The Cable industry in the US is crying out for a business to change the mould – do what is right – if Comcast are prepared to have the ‘balls’ to be the one, then good on them. That is the thing – it takes balls to be different (metaphorically speaking). Those that dare will be the ones who have the longest and most sustainable future.