The continued emphasis carriers are placing on alternative sales and information channels appears to be paying off as a report from industry research firm Compete Inc. showed a dramatic increase in the number of wireless service prospects who are surfing carrier Web sites in search of information.
The report showed that between January 2003 and May 2004, the volume of customers exhibiting non-consumer behavior-or what Compete termed “prospect” customers-visiting Web sites of the nation’s six largest operators increased more than 40 percent from just more than 7 million per month to nearly 11 million per month.
“Wireless is a highly competitive and complex industry, and people want to do as much research as possible before selecting a carrier,” said Adam Guy, director of Compete’s wireless practice. “Carriers are realizing that need and have increased their spending and resources to attract and eventually gain those online consumers.”
An unrelated customer-care survey released last week by J.D. Power and Associates corroborated Compete’s findings. J.D. Power said that while only 9 percent of wireless customers surveyed said they contacted their carriers through either an e-mail or the Internet, the results were three times higher than the company’s 2003 survey.
Among individual carriers in the Compete study, Verizon Wireless posted the greatest online volume during May with nearly 3.5 million individual hits, followed by AT&T Wireless Services Inc.’s 2.44 million and Sprint PCS’ 2.37 million hits. Compete noted that Verizon Wireless managed to surpass AWS, which has led the monthly prospect volume for nearly all of the past year, due to aggressively investing in its online sales channel and AWS apparently decreasing its online spending.
Not surprisingly, Nextel Communications Inc. held down the bottom end of the ranking with just more than 1.25 million prospect hits during May. Nextel’s business-oriented customer base is more likely to track down information through its highly developed traditional sales channels.
“Nextel has seen an increase in online prospects and has begun to invest more into promoting alternative channels,” Guy explained, adding the carrier’s youth-oriented Boost Mobile subsidiary is a prime example of a Web site that is set up to both attract and keep customers’ attention.
While online interest for wireless carriers is booming, the J.D. Power and Associates 2004 Wireless Customer Care Performance Study found that carriers are still having troubles meeting customer-care expectations.
The survey included input from nearly 7,500 wireless customers. People were asked about their interactions with carriers’ customer service automated response systems and processing issues, including how long it took to resolve a problem and how long people were on hold. The survey found that customer satisfaction for the industry dropped 7 percent year over year, with the largest declines occurring in the automated response system area.
ARS problems centered on whether there are too many prompts/instructions while navigating through menu selections and whether the subscriber is able to talk to a live service representative when needed.
The survey also found that customers were on hold for 6.4 minutes, a minute longer than in last year’s report, and the total average contact time increased more than two minutes to 13.3 minutes.
J.D. Power attributed some of the increase in customer service call times to more advanced features that have been launched recently and said that carriers could be risking increased customer churn if they don’t get a handle on customer service issues.
“As more value-added services are offered and tried by consumers, the number of contacts needed to resolve a customer complaint or issue has increased,” said Kirk Parsons, senior director of wireless services at J.D. Power. “Since churn levels triple among those who rate their wireless carrier below average in customer care, the challenge for wireless providers is to offer an easy and efficient customer-care transaction experience.”
The study also found that more than half of wireless users surveyed said they had contacted a customer service department for assistance in the past year; that among those who contact their carriers, 65 percent do so via phone and 26 percent through a carrier’s retail store; and that most customer-care inquiries involve billing and network-quality issues.
Individually, T-Mobile USA Inc. ranked highest among the nation’s seven largest wireless operators in customer service with an index score of 103. Verizon Wireless posted the second-highest index score of 98, with Alltel Corp. and Nextel posting index scores equal to the industry average of 93. AWS and Cingular both received index scores of 88, with Sprint PCS finishing last in the rankings with an index score of 86.
The study noted T-Mobile USA performed “significantly higher than all other carriers included in the study,” and it performed particularly well in the ARS area and in hold-time duration.
