IP: TELECOM STATS FROM CONSUMER POLL ARE IN (from Telecom)

[Dave Farber <farber () central cis upenn edu>]

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        NEW TELECOM STATS FROM CONSUMER POLL ARE IN
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A recent survey of 100 business and 250 residential telephone
users sponsored by Unisys Corp. and Telephony and Global Telephony
magazines asked respondents to rate their long distance, local
telephone, cable and cellular companies on a variety of criteria,
both as they are performing now and on their credibility in providing
a range of different services in the future.
  "Respondents consistently picked long distance providers in
almost every category," said Steven Titch, editorial director for
Telephony and Global Telephony magazines. "Incumbents also do well
in their respective categories, but long distance does best in the
sort of cross-over between local telephone, cable, cellular and long
distance service we expect to see in a competitive market."
  Despite the respondents general endorsement of the service
provided by long distance carriers, the results of the survey make it
very clear that many long distance, local telephone, cable and
cellular service providers are not meeting even the most basic buyer
values for service and reliability, and that no company has
effectively established a close relationship with its customers.


Basic buyer values -- what customers really want


o Almost 75% of the residential customers would prefer a
  single provider for all their telecommunications needs.


o Despite all the talk about the information superhighway and
  video-on-demand, the Unisys/Telephony survey showed these are
  not important to residential customers - only 16% said that such
  services are "very important".


o Residential customers are concerned about accurate bills,
  service that does not break down and fast fixes - with only a
  single call - when service fails. Customers are also concerned
  about telephone fraud. The precise numbers: Accurate bills --
  86% of the respondents listing this attribute as "very
  important"; No breakdowns -- 82% list as very important; Fix
  breakdowns fast -- 79%; Fix problems with only one call -- 79%;
  Protect me from fraud -- 79%.


o Business customers look for reliability of the service and
  the time to repair it when it breaks down. In fact, businesses
  rank these attributes even higher than the residential customers,
  with everything else falling far behind. The top criteria were
  reliable service (93% rated "very important"), fast fix for
  problems (89%), responsive service (84%) and quality products
  (83%).


Long distance is tops, with local telephone a close second.


o Long distance gets significantly higher ratings than all
  other services, both in terms of overall ratings and on key buyer
  values. Business users, for example, rate long distance as two
  times better than local telephone service in the critical areas
  of reliability (48% "very good" for long distance, versus 23% for
  local) and fast response to breakdowns (45% to 23%), and almost
  three times better than cellular (48% to 17%, and 45% to 19%,
  respectively). Residential customers also give long distance by
  far the highest rating in every category, except in providing
  educational and entertainment television programming.


o Local telephone companies have more credibility among
  residential customers than among business customers. Among
  residential customers, local telephone service scored within 15%
  of the rating of long distance service on most criteria.
  Residential customers also saw the local telephone companies as
  being a very credible source of video, long distance, data and
  cellular services in the future.


Business is a tougher customer, and sees the local telephone
monopoly as a problem.


o In general, the business respondents were half as likely as
  the residential customers to say that long distance and local
  phone companies are doing a very good job at meeting their
  telecommunications needs today -- or are able to meet their needs
  in the future. Business users also think providers will do best
  in the future what they do today -- e.g., that long distance
  companies will perform best at providing long distance service.
  Residential users were much more willing to accept cross-over.


o Business customers were tough on their local service,
  rating it approximately half the quality of that provided by long
  distance companies for reliability and responsiveness. The worst
  showing by far for the local exchange carriers was reasonable
  price -- where the ratio was a dismal .28 of the long distance
  rating. Business customers clearly see the monopoly at the local
  level as a barrier to reasonable price on telephone service.


o Almost half of all business respondents reported having
  switched one or more of their telecommunications providers in the
  past two years. This is a much higher rate than that reported by
  the residents, and, given the number who say they would probably
  switch, businesses will be twice as likely to switch in the
  future: 29% of the business versus 18% of the residential
  respondents said they would either definitely or probably switch
  long distance carriers, with 41% and 28%, respectively, saying
  they would switch local telephone service.


o Cable companies and wireless providers have poor reputations
  among customers. Respondents were asked to rate a broad range
  of other consumer and business-related services. Residential
  customers rate cable and wireless providers as having poorer
  service than the US Postal Service (mean ratings of 3.82 for
  the USPS, 3.57 for cellular, and 3.42 for cable). The only
  service rated worse is that provided by automobile dealerships
  (3.05 mean rating).


o Cable television is not even seen as providing good content
  by the survey's residential respondents. Cable got poor ratings
  in programming, and long distance and local telephone companies
  were rated by the respondents as being just as credible in
  providing cable service as cable companies. Cable was rated
  "very credible" at providing educational and entertainment
  programming in the future by only 30% of the respondents,
  compared to 26% each for both long distance and local telephone
  companies.


AT&T is very strong


o AT&T has earned a great deal of customer loyalty, especially
  among business users. Only 15% of the respondents on the
  business survey said they would probably switch away from
  AT&T. That compares with the 38% who said they would either
  definitely or probably switch from MCI and the 41% who thinking
  of switching from all other long distance carriers.


o AT&T was the fourth most frequently mentioned provider of
  local telephone service, even though AT&T has not offered local
  service since the break up of the Bell telephone system in 1984.
  AT&T clearly dominates customer mindshare, a dominance made all
  the stronger by its continuing advertising and its nationwide
  brand identity.


One area where all telecommunications companies are falling down
is in customer relations. Residential customers in particular feel
this lack of a strong relationship with providers - either positive
or negative.
   Given that almost 75% of the residential customers would prefer a
single provider of all telecommunications services, there is a real
potential opportunity for a company that can make a strong and
lasting positive impression on customers, and educate and reassure
them about telecommunications products, services and prices.