Loving to Hate Our Big ISPs

The American Customer Satisfaction Survey (ACSI) was released earlier this summer that ranks hundreds of companies that provide services for consumers. Historically cable companies and ISPs have fared poorly in these rankings compared to other businesses in the country. The running joke reported in numerous articles about this survey is that people like the IRS more than they like their cable company (and that is still true this year).

But something interesting happened in this year’s survey and the ranking for cable companies collectively improved by 3% and consumer confidence in ISPs climbed 5%. There is no easy way to understand a national satisfaction survey, but those trends are interesting to contemplate.

Let’s start by looking at the numbers. Consumers still rank cable TV providers as the least liked group of companies in the country across all industries, joined at the bottom by ISPs. The ACSI ranks each company and each industry segment on a scale of 1 to 100. The top-rated industries are breweries (84%), personal care and cleaning products (82), soft drinks (82), and food manufacturing (81).

By contrast, cable providers are ranked the lowest at 64 followed closely by ISPs at 65. Joining these companies at the bottom are local governments (65.5), video-on-demand providers (68), and the federal government (68.1).

The overall ranking for cable providers grew from a 62 in 2019 to a 64 in 2020. I can only speculate why people like cable companies a little more this year. This could be due in part to huge growth in cord-cutters who no longer watch traditional cable TV and who might perhaps no longer rate a product they don’t use. Or perhaps folks have come to appreciate the cable product more during the pandemic when people are going out less, and likely watching TV more.

The cable providers at the bottom of the rankings continue to get low satisfaction ratings, with Suddenlink (56), Frontier (58), and Mediacom (60). Just above these companies are two of the largest cable providers – Charter (60) and Cox (61). But all of these companies had a slightly improved satisfaction ranking over 2019. The highest-ranked cable providers continue to be Verizon FiOS (70) and AT&T U-verse (70), now relabeled as AT&T TV.

ISPs didn’t fare much better. It’s worth noting that this list contains many of the same companies on the cable provider list, but consumers are asked to rank cable services separately from broadband services. The overall satisfaction for ISPs grew from a 62 in 2019 to a 65 in 2020. The same three providers are at the bottom – Frontier (55), Suddenlink (57), and Mediacom (59). At the top are the same two providers – Verizon FiOS (73) and AT&T Internet (68).

Part of the explanation of the change in approval ratings for the industries might be little more than statistical variance within the range of sampling. The rankings of individual ISPs vary from year to year. Consider Charter, ranked as an ISP. The company was ranked highest in 2013 and 2017 at a 65 ranking and lowest in 2015 (57) and 2019 (59). This year’s increase might just be variance within the expected range of sampling results.

What matters a lot more is that our cable companies and ISPs are generally consumer’s least favorite companies. This has always benefited smaller ISPs that compete against the big companies. One of the most common forms of advertising for smaller ISPs is, “We are not them”.

People don’t rate cable companies and ISPs so low due because they deliver technical products. Other technology sectors have much higher satisfaction ratings such as landline telephones (70), cellphones (74), computer software (78), internet search engines (76), and social media (70). Consumers are also like electric utilities a lot more than cable companies and ISPs – electric coops (73), and investor-owned and muni electric companies (72).

It’s always been somewhat disheartening to work in an industry that folks love to hate. But I’ve always been comforted by the fact that my smaller ISP and cable clients generally fare extremely well when competing against the big ISPs and cable companies. I have to assume this means people like small ISPs more than the big ones – or perhaps hate them a little less. That’s something every small ISP should periodically consider.

Big ISP Customer Service Still at the Bottom

This time each year we get a peek at how customers view the telecom industry, and for many years running it’s not been a pretty story. The annual American Customer Satisfaction Index (ACSI) was recently published and shows ISPs still ranked at the bottom of all industries in terms of customer satisfaction.

The survey to create the ACSI rankings is huge and involves over 300,000 households and looks at services that households use the most,  considering 400 companies in 46 different industries across 10 economic sectors.

Customers really hate the big cable TV companies and big ISPs. The ACSI index ranks companies on a scale of 1 to 100 and the two lowest ranking industries are Subscription TV Services (62) and Internet Service Providers (62) – both with the same composite ranking as last year. All other industries have rankings in the 70s and 80s, with industries like breweries (85), TV manufacturers (83), soft drinks (82), food companies (82), and automobiles (82) at the top.

The companies ranked just above ISPs have much higher rankings and include the US Postal Service (70), Fixed-Line Telephone Service (71), and Social Media Companies (72).

The big cable companies rank from the low of Altice (55) to a high for AT&T U-Verse (69). The only other companies that rank higher than the industry average of 62 are Verizon FiOS (68), Dish Networks (67) and DirecTV (66). The biggest cable companies fare poorly – Charter (59) and Comcast (57).

Internet Service Providers didn’t fare any better than cable companies with the overall industry ratings at the same 62. The only three ISPs with rankings above the average are Verizon FiOS (70), AT&T Internet (69) and Altice (63). At the bottom of the rankings are Frontier (55), MediaCom (56), and Windstream (57). The big cable companies don’t fare well as ISPs – Charter (59) and Comcast (61).

This continues to be good news for competitive overbuilders that provide good customer service. It’s been obvious over the years that customers hate calling the big cable companies and ISPs because the process of navigating through live customer service is time-consuming and painful.

But these rankings go far deeper than that. At CCG we conduct surveys for our clients who are usually looking at entering a new market. We also interview a lot of telecom customers during the course of a year. The poor opinion of the big providers in our industry runs deep. I see customers that really dislike the process that many of these companies force upon customers who have to negotiate to get lower rates every year or two. People don’t like to find out that they are paying a lot more than their neighbors for the same services. People also dislike service outages which happen far more often than they should. In the last year, we had several headline-grabbing major outages, but more aggravating to customers are the small daily outages that can hit without notice. Households have come to rely on broadband as much as they do for other household necessities like electricity and water, so outages are becoming intolerable.

Competitive ISPs are not automatically better at customer service than the big companies. Some competitive providers also offer too many product options and are willing to negotiate rates with customers. Small ISPs can also fall into the trap of turning every phone call to the company into a sales pitch. Good ISPs are learning to deal with customers in ways tailored to each customer. I know I personally would be thrilled to have my entire ISP relationship be handled by email or text, as long as by doing so I could be assured that I’m getting a good price. Most ISPs still have a long way to go – although I doubt that any ISP is ever going to be liked more than beer!