After Hours

What really counts - good customer service or the lowest price?


Recently, more than 400 companies were examined by MSN Money for their customer service efforts - and six out of the worst 10 were communications providers. Among the nation's bottom 10 - cable providers, wireless carriers and one satellite company dominated the study's results.  Here are some of the details of this study – tell me if you’re surprised by the companies in this 'hall of shame':

  • 40 percent of respondents said Sprint Nextel had the worst customer service out of all companies listed.
  • Cable companies Comcast (3) and Time Warner Cable (4) cracked the top four
  • AT&T and Verizon - both making huge pushes into the pay-TV space via fiber networks - made the bottom 10 list at the fifth and eighth spots
  • DIRECTV, rounded out the list at the final tenth spot.

"What many of these companies have in common is that, even though they appear to take their customers for granted, their customers have little choice but to swear and bear it," said MSN Money's Christopher Oster.  Other companies included in the bottom 10 for customer service include Bank of America (2nd), Citibank (6th), Wal-Mart (7th) and Wells Fargo (9th).

Are you surprised yet?

 

In 1992 I was hired as one of the founding senior executives at DIRECTV. Before it was a household name, with millions of subscribers, it was just an interesting idea at a company called Hughes Communications based in El Segundo, California. Over the years, we figured out how to make a good television service (”Up to 150 all digital channels!”), learned about marketing through retailers (”we know what the consumer wants - they trust us..”) , and we built our business around a pretty good customer service focus that was unlike the cable companies back then.

 

With the help of some acqusitions of our competitors, DIRECTV became the number 1 satellite broadcaster. It was a satisfying experience - building from the ground up. Our team grew too, of course. One of the companies we bought, Primestar Satellite, had more employees then we did (about 3800 vs our lower number of about 1100) which really caused growth internally. I was asked to step in to manage Primestar at that time and consequently started commuting to Denver each week.Primestar had been owned by Liberty Media when we bought it.

I was impressed with many of their executives and employees - often a higher caliber than we had at DIRECTV; and very impressed with their focus on being #1 in customer service which had developed intense loyalty with their subscribers. DIRECTV cared about customers; but Primestar was driven by an intensity I hadn’t seen since I left the retail sector years earlier. Technical decisions were often determined from the perspecitve of what was right for the Primestar customer. Very smart, and in my mind, the only way to build long term relationships.

 

After an extremely successful integration of the 2 companies, I left DIRECTV in 2002 and set up my coaching and consulting practice. I remain attached emotionally because of old friends and the initial focus of my practice which is media and broadcast.

In 2004 Rupert Murdoch’s team from News Corp acquired control from then-owner of DIRECTV, General Motors. They assumed the management of it and as these things always happen, new approaches were put into place and new ideas took hold. Since then, “customer-first” thinking has become far less a priority. You see this change daily: in how they use their bandwidth to push other services and products from the News Corp entity vs when they previously offered a wide choice of pay per view movies, how they answer their phones (or don’t), how they treat their outsourced service providers (which in turn harms the consumers’ good will toward DIRECTV), and the churn of management and employees who were focused on the issue in many departments. 

 

Libery Media, run by John Malone’s team, is now buying DIRECTV from Murcdoch.  They will make changes in how DIRECTV functions. They've already reached out to Cablevision to see if some joint activity for Hi - Def programming can be done. This is smart. I know because I spent 2 years consulting with that entity’s boss, Chuck Dolan, as he attempted to launch an all HD satellite TV service starting in 2004.  Both Malone and Dolan have been around the TV business forever, and their successes and longevity show they know what works over the long haul. Both understand that lots of HD is a customer service benefit which could cause consumers to leave their existing TV  provider for another. Expect to see more focus at DIRECTV elsewhere on what the customer wants as well. 

Customer service is not a wasteful expense line - it’s a business investment as much or more than new equipment, or marketing costs.

I am optimistic that DIRECTV will return to the roots which made it such a phenom in the last decade. The first boss of the company, Eddy Hartenstein, understood the importance of looking after one’s paying customers. We all knew it. DIRECTVs then-levels of customer satisfaction showed it. Here’s to the future of a once fabulous organization which has gone stale.

                                                                                                                                   - john

                                                                                                                            Career Coach

 

 

About

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

10 comments
Slayer_
Slayer_

Considering how many companies outsource their phone support to India and China.

dcolbert
dcolbert

Old retail adage: I can give you any two of the following: Best Price Best Quality Best Service and Support You pick which one you want to give up.

dogknees
dogknees

In most cases, there is an irreducible level of service that a company should provide. Below that, it doesn't matter if it's free, it's still not acceptable.

colin.brown
colin.brown

That's the problem-if I knew that spending a few pounds/dollars more meant I would speak to a representive within 3 rings of the phone,then I'd willingly pay it,but there is no guarantee of that. My rule of the thumb is never signup for a service which has only just been launched. There is no guarantee that the company will have any idea of the capacity reqd to service the demand. Good examples would be TalkTalk and Orange Broadband,both of which were cheap,and so vastly oversubscribed-and the service was appalling.

Zen37
Zen37

I may be a little innocent in my thinking on this, but if I'm buying a physical object that has no direct service attached to it, i want the best price. If I'm buying a service or a device with a direct service attached to it, then i want the best customer service. Things are made so cheaply nowadays, i wonder if good customer service is important. When i buy something physical (like a TV, a toaster or something that does not require maintenance or a direct service to operate), i don't ask what will happen if it breaks, because i know it will and i know that the customer service will s*ck, so all i care for is the price. But when i buy a service, i want the best customer service possible because often, there is either territorial monopolies, few competition and other aspect that makes quality CS valuable.

Wayne M.
Wayne M.

I guess the choice I am usually faced is to select which poor quality service to choose. Customer service is not a concern for large corporations. For every person who walks away because of poor servce, another person arrives from a competitor for the same reason. Businesses outsource most of their service operations. The focus of these outsourced service operators is on keeping the main company happy and this largely means keeping the costs down, and the main company will deny any responsibility for the shortcomings of their subcontractors. Outside of some family owned restaurants, I can't think of any businesses that seem to care about customer service. There is always a new face lined up to give them money, so why care about loyalty?

Deadly Ernest
Deadly Ernest

OK, take the scenario of buying something for a one time use - who cares about customer services, I check it's working before I leave the shop. But with an on-going situation, well customer services is what makes or breaks it for me. I DON'T want to be sitting around with faulty gear waiting for some id10t to talk to me when they feel like it. I've worked retail and help desks in the past. One important thing I've noticed, clients will put up with almost anything provided they feel they can trust what you're saying and you keep in contact - and 90% of good customer service is talking to the customer; tell them the truth and what's actually happening, they'll usually work with you. Bullshit them once, fail to keep the communication lines open, and you've lost them.

CG IT
CG IT

to quote the poll "Customer Service is what counts for me. Saving a couple of bucks and having nobody to help me isn't worth it. (114%)" that says it all.

mjd420nova
mjd420nova

The only result of lower prices is terrible customer service. If you can't support high enough prices then you can't afford to compensate with sales personnel. Stores are full of KNOW-NOTHING sales people who are eager to sell anything. However , knowledgable sales people will bring in the big tickets but demand higher wages too.

paul
paul

As a small IT business owner, my number one focus has shifted from lowest price to excellence in customer service. As a result, I no longer have to advertise. The word has gotten around and is spreading like wildfire. I know that I will pay more for customer service and lousy customer service will lead to me shop around. I am not the cheapest in my area, but my service is exceptional from what my clients tell me.

Editor's Picks