As industry leaders disperse after having gathered here at the National Cable Television Association's annual conference this week to discuss a slew of new services with higher profit margins--including high-speed Internet access, cable phone service and interactive television--they recognize the potential for a corresponding slew of customer service nightmares.
"It's a real dilemma that we're all struggling with," said Mary Cotter, president of Time Warner Cable's system in Syracuse, N.Y.
Cable operators need to provide the advanced services to compete against direct broadcast satellite (DBS) operators, such as DirecTV and Echostar, and digital subscriber line (DSL) providers, including the Baby Bells and other phone companies.
The rapidly increasing competition has made impeccable customer service standards a must, according to Bob Drake, senior vice president at Talmey-Drake Research & Strategy, a marketing and public opinion polling firm, and a frequent public image consultant to company executives and politicians.
"Dissatisfied customers will leave--it's a no-brainer. But some satisfied customers will also leave," Drake said, noting that price competition makes solid customer service alone no longer enough to ensure consumer loyalty.
For years consumer advocates and Congress have criticized the cable industry. Until last year the industry operated under stringent rate regulations imposed after it hit consumers with steep monthly subscription-fee hikes in the 1980s and early '90s.
Cable companies have made strides toward improving their customer service image when it comes to their core TV business by answering phone calls faster and training technicians to be more sensitive to customer needs. For example, regulations require phone calls to be answered in a certain amount of time, and some cable operators even insist their technicians now wear disposable paper "booties" over their shoes so as not to track dirt into customers' homes.
Still, according to two recent studies by Talmey-Drake, cable customer satisfaction has been on the decline since 1994. Only 22 percent of those surveyed said they are "very satisfied" with cable service, compared with 66 percent for satellite TV companies. Phone companies and Internet service providers (ISPs) also score higher than cable companies, the studies show.
"Our customer satisfaction is quite low," said Suzanne Keenan, senior vice president for customer service at Comcast. "Customers think our prices are too high. The likelihood to switch is going up."
Last year, the city of Fremont, Calif., passed an Internet "bill of rights" after a handful of active Excite@Home cable modem subscribers complained of lower-than-acceptable customer service, including lengthy hold times for help-line phone calls.
"Our calls became much longer and more complex when we launched digital (video) and Road Runner (high-speed Net access)," said Cotter. "It's becoming more difficult to meet the requirement of answering 90 percent of customer service calls within 30 seconds."
Cable operators have increased their internal training programs and have created separate call centers specifically to handle complex issues surrounding new advanced services, executives said. Cable operators also are attempting to improve employee satisfaction, which is key to providing top-notch customer service, Keenan said.
Wayne Watson, vice president of customer care and operations for AT&T Broadband, acknowledges that training his company's 5,000 customer service representatives to handle inquiries about new technologies is not an easy task. "The challenge is the learning curve," he said.
But Watson believes cable operators get a bad rap and that new services will not pose long-term customer service problems.
"When you stack our performance up against other ISPs, we're world-class," Watson said. "And yet there's a perception that we're not."