Verizon Wireless and T-Mobile USA Inc. again outranked the competition in a J.D. Power and Associates consumer survey, this time posting the highest retail sales satisfaction among the wireless industry’s six largest operators.
The study was based on experiences reported by 6,144 wireless users who completed retail sales transactions within the past six months and measured overall customer-satisfaction performance of the major wireless carrier-branded stores based on a handful of factors, including sales staff, price/promotion, store display and store facility.
The survey uses a 100-point scale, where the index is centered on an industry average. The maximum possible points that can be earned are 200 and the lowest score is 0. Final scores are based on the lowest ranking carrier’s score and are determined on a curve.
Verizon Wireless and T-Mobile USA both posted index ratings of 100 in the study, well above the industry average of 94. J.D. Power and Associates noted that both carriers received particularly high ratings relative to the competition in the price/promotional dimension of the study.
Nextel Communications Inc. and Alltel Corp. were tied at a distant third in the study with an index score of 93, followed closely by Cingular Wireless L.L.C. with an index score of 92 and Sprint Corp. with an index score of 90.
T-Mobile USA also finished first in the 2004 survey, though it failed to match the index score of 109 it garnered last year. Verizon Wireless lost one point of its index score compared with the 2004 survey, but jumped from fourth place last year into a tie for first this year.
Both operators also dominated previously released J.D. Power and Associates’ 2005 surveys for overall wireless satisfaction, call-quality, customer care, and business-customer satisfaction. Verizon Wireless and T-Mobile USA also are the only two nationwide operators that have not been involved in any significant merger-and-acquisition activity in the past few years.
Overall, the 2005 retail satisfaction study found that the likelihood of consumers dissatisfied with their retail purchasing experiences who expressed interest in switching providers increased 46 percent compared with the 2004 study. The study also noted that 20 percent of subscribers who were not satisfied with the overall retail purchase experience said they will “definitely” or “probably” switch from their current carrier within the next 12 months, compared with 13 percent in 2004. Dissatisfied customers also are 25 percent less likely to visit the same carrier store again to purchase wireless services and 35 percent less likely to recommend the carrier service to family and friends in the future.
The increased dissatisfaction was highlighted by the drop in the industry average index score, which plunged from 100 in 2004 to 94 this year.
“With fewer new customers entering the market, the wireless industry is becoming fiercely competitive for retailers,” noted Kirk Parsons, senior director of wireless services at J.D. Power and Associates. “The retail stores of wireless carriers face strong competition in the areas of price and promotions from national electronic retail outlets such as Best Buy and RadioShack, which offer wireless service. It’s imperative that wireless service providers concentrate on retention strategies, as the ability to expand the customer base becomes more difficult.”
The study also found that the average retail sales transaction increased eight minutes from 2004 to about 70 minutes this year, and consumers were more likely to express a positive sales experience if they felt less pressured during the sale.
