The city of Los Angeles' lawsuit against Time Warner Cable has prompted a neighboring community to look at suing the cable provider.
Now the city of Costa Mesa, Calif., is also considering suing Time Warner, claiming that its residents have gotten poor service, too. Complaints had gotten so out of hand, that earlier this year the city council called a public hearing to question a Time Warner representative about the issue.
Even though service has improved over the past few months, the city's attorney said that residents have experienced similar issues as those outlined in the Los Angeles complaint, according to the Daily Pilot, the local newspaper's Web site.
Late last week, the city attorney for Los Angeles filed a suit against Time Warner alleging the company broke multiple laws by providing poor service to its citizens. The city is seeking to collect tens of millions of dollars in fines.
The suit is linked to problems Time Warner experienced after it took over cable systems from bankrupt cable operator Adelphia. Time Warner also picked up some systems through a swap with Comcast, its co-buyer in the Adelphia transaction.
Time Warner increased its subscribers in the Los Angeles region from 350,000 to 1.9 million literally overnight. The company was overwhelmed as it migrated e-mail accounts, resolved billing issues, and transitioned other video and broadband systems to its own systems. The result was allegedly poor service and a doubling in complaints.
Specifically, the suit alleges the company failed to live up to its part of the franchise cable agreement, which requires the company to answer subscribers' calls within 30 seconds and begin repairs of service interruptions within 24 hours of notification in 90 percent of its service calls. The suit claims that less than 60 percent of calls for service were answered on time and that broadband and TV "was so intermittent and inferior in quality that it was not much better than no service at all."
Time Warner says that it's working to improve customer service in the region, but it disagrees with the suit's allegations.
"We're proud of the service we provide to the L.A. area," a spokesman wrote in an e-mail. "We've made great strides in customer service, evidenced by the fact that call volumes are now lower than pre-acquisition levels, despite being apporximately five times larger."
Improving customer service is a big deal for cable operators, especially as they face increased competition from phone companies. Time Warner is one of many companies with several initiatives in the works to improve its service. But will it be too late? Many customers are already ditching Time Warner in the L.A. area and switching to satellite providers. AT&T also provides its U-verse TV and broadband service in parts of the area, which could give some residents another choice.
As cable and phone companies slug it out in markets across the U.S., improving customer care is becoming a core part of their strategies.
For the past few years, cable and phone companies have been neck and neck in many markets. Cable companies have introduced new phone services to compete with phone companies, and phone companies have started offering competing TV services.
On the broadband front, cable and phone companies now offer similar speeds in feeds in many markets. While cable has historically been priced slightly higher than services offered from phone companies, these too are evening out in many markets with various promotional service offerings.
Now, more than ever, consumers seem to be influenced by their perception of a particular company and their own experience with customer care. What's more, the Internet has changed things. It used to be that a single disgruntled customer would influence only a few friends and neighbors. But with the advent of blogs and forums all over the Web, unhappy consumers can find a much wider audience, potentially reaching thousands or even millions.
"Customers are making choices every day," said Rick Germano, senior vice president of Customer Operations for Comcast. "They are trying to figure out which company to go with to get TV, high-speed Internet service, and now phone service. And their perception of who is offering those services is a big driver in who they choose."
Unfortunately for Comcast, its customer service has taken a beating recently. Just last month, the company got the lowest score it's ever gotten on the American Consumer Satisfaction Index, a major customer satisfaction study conducted by the University of Michigan. And last week, it ranked as the second worst company in terms of customer care in an MSN Money customer survey.
These results follow publicized tales of a technician sleeping while on the job and a hammer-wielding grandmother going crazy due to poor service. And it also follows accusations that the company throttled BitTorrent peer-to-peer traffic.
Germano acknowledged the company needs to improve its service and perception.
"Comcast takes full responsibility for what these surveys are saying," he said. "We don't disagree with the results. And we're listening. We get it. But we look at this an opportunity for us to improve. As a business we have to do it."
Comcast's main competitors, AT&T and Verizon Communications, have faired better in these surveys than Comcast. But that doesn't mean that there aren't pockets of dissatisfied customers.
In fact, my sister who recently moved to a suburb near Boston chose to get her Internet and TV service from Comcast even though Verizon's new Fios service was available in her town. Why? The reason was simple. The Verizon technician who was scheduled to set up her basic phone service didn't show up twice for his appointment.
"I knew from the phone incident that there was no way I was going to get Verizon's Fios service, no matter how good or fast the service was supposed to be," she said.
My sister isn't the only dissatisfied Verizon customer I've heard from. Several readers have sent e-mails and commented on the "Talk Back" of some of my blogs saying they have had similarly bad experiences when trying to get Fios service installed. Verizon executives acknowledge the company has experienced some growing pains, especially as it rolls out its new Fios service. But Tom Maguire, the company's customer service czar, says the company is making improvements.
"I don't think anyone wants to be known for providing terrible customer service," he said. "Everyone wants to do the right thing for the customer. So we have to figure out how to remove obstacles that are preventing us from delivering great customer service every time. If we can't deliver the best product with the best service, the customer will go somewhere else."
Winning customers over
So what are these companies doing to improve?
Comcast has hired 15,000 new customer service agents and technicians over the past 18 months to help the company answer calls and provide service to customers. It has also rolled out new high-tech diagnostic tools for agents in the field and at call centers to help better assess problems. Comcast has also started re-dispatching field technicians if it looks like a certain technician may not be able to get to his next appointment.
Customer service agents are also starting to work on Saturdays and Sundays to schedule and serve customers when it's most convenient for them. And it's offering real time online chat services so that customers can talk live with a customer account executive.
Germano said the company is trying to listen to customers more, and that includes establishing a special team within the company to follow blogs, like the Consumerist.com and online forums where many problems are often reported by customers.
Verizon's Maguire said that his company is doing something similar. Like Comcast, Verizon has a team that monitors blogs. And Maguire himself often answers e-mails from customers with complaints as part of what the company calls a "you touch it, you own it" philosophy.
The phone company is also starting to roll out a new text-messaging system that automatically alerts customers when a technician has been dispatched to a location. It will alert customers if the technician is running late.
In addition, Verizon has made big improvements in its customer care centers. One major change is that it has been staffing the fiber solutions centers, which handle technical issues with the fiber-to-the-home Fios service, with customer care representatives who can resolve billing and enrollment issues.
Verizon also has improved its voice response system to help customers resolve certain issues on their own. And it's given customers who would rather reach a human representative a way to navigate out of the voice response system.
It's implemented a new queue-busting system that monitors the flow of calls into call centers. If a center is getting overloaded with calls, more representatives are added dynamically to handle the overflow calls.
"Our goal is to make it easier for customers to do business with us," Maguire said. "It's more cost effective and better marketing to take care of the customers you already have than to go out and try to acquire new customers. And the magic formula for doing this is really the golden rule. Treat customers how you want to be treated."
Another major trend that seems to be filtering into every major broadband provider is a greater focus on standardizing processes. While local branch offices will continue to handle local service calls and dispatch technicians directly to customers, bigger service providers, such as Comcast, Verizon, and Time Warner Cable, say that it's important to make sure that best practices are shared throughout the company.
"If someone calls with a problem, chances are good that they are talking to someone in their town," said Alex Dudley, a spokesman for Time Warner Cable. "But they will still have the big company experience in that we are sharing what we've learned from our 150 million calls a year to implement best practices that can be shared across the company."
Maguire, who took over as Verizon's head of customer care late last year, said he's already started seeing an improvement.
"Improving customer service is a journey that really has no end point," he said. "We're always striving to do better. But I do think things have gotten better. One indication is there are a lot fewer calls that get escalated to my level than there were when I started."
When Robert Pedersen's Dell Inspiron E1705 laptop went on the fritz, he naturally assumed the 5-year Next Day service warranty he purchased would get him instant help from the company's customer service staff.
That was April 18. By May 4, he still had yet to have his guaranteed next-day in-home repair appointment scheduled. And it wasn't for lack of trying. He sums up his frustration on his blog: "Close to a month, 37 different communications, a Certified letter to the CEO of Dell Computers, Inc, and 29 actual hours working directly with Dell Computers, Inc in my attempt to simply get my Dell laptop repaired or replaced."
Pedersen certainly isn't alone. Most people who own a computer can probably cite at least one example of bad customer support or an unresolved technical issue with their PC maker. And to be fair, customer service is one of those thankless jobs. Rarely do we hear or read about good service experiences. Bad customer support is what gets written--or blogged--about.
But Dell seems to get the
So what happened? A combination of doing business in a maturing industry, the resource-intensive demands of being a consumer tech company, and the company's evolving business model is likely what tripped it up.
As disaster stories circulate, public perception also becomes a problem (Hewlett-Packard is ranked 76, while its Compaq brand, for example, is actually last at 73 in the rankings, yet you don't hear noisy complaints about their service as often).
"(Dell is) below the industry average" of 75, said professor Claes Fornell, head of the ACSI at the University of Michigan. "For a company that has really been a high flyer--they were No. 1--for them to drop is problematic."
Consumer Reports this week ranked tech support among PC companies, and Dell came in third in notebook support with a score of 60 out of 100, far behind Apple with 83. It also trailed Apple's score of 81 in desktop support with a score below 60.
It's not as if Dell's not trying or unaware of customer perception. The company says its own metrics show improvement in the past two years. "But we're not finished. We are going to put much more rigor around our service delivery record and aim to improve so we can meet our customer expectations in this critical part of the business," said company spokesman Bob Kaufman.
Dell is known for actively taking suggestions from customers, and has already poured millions of dollars into improving how it helps its customers. Last month Dell announced the availability of more premium services for consumers for more specialized support, and two years ago the company said it would invest $100 million in tech support and put more resources behind its remote support operation. Experts say two years should be more than enough time to show improvement in customer satisfaction.
Luckily, those same customer service gurus say there are concrete steps the computer maker can take to get customer service back on track:
Decide what you are
The tension seems to lie with Dell's identity: Is it a manufacturing company? Or a consumer products company? Manufacturing companies are always looking at the bottom line. Cutting costs and doing more with fewer resources to squeeze the most value it can.
Consumer-facing companies, particularly technology companies, have to do a lot of handholding with customers. And tech support is resource intensive: it requires knowledgeable people answering the phones helping callers who may or may not know the difference between, say, a USB port and an Ethernet port. To this point, Dell says that 80 percent of the time most computers that have issues, the problem is not the hardware.
Another key to the company's troubles is likely found in how fast it grew, says Donald Rosenfield, a senior lecturer in management and operations strategy at MIT's Sloan School of Management. Dell became the largest manufacturer of PCs in the world in the early part of this decade, but after dominating, has since dropped to No. 2.
"When a company grows, sometimes they don't pay as much attention to all aspects of the process as they should," said Rosenfield. "In Dell's case, they didn't focus on services as much as they should have."
Plus, he said, the focus on cost reduction to stay competitive in a commoditizing industry, didn't help. "That led them to trouble in last year or two, though they have tried to devote a lot more attention and resources to customer service."
Customers love customization
Customer satisfaction can be measured in three basic ways: Price, quality of the product and service, and the fit between customer needs and a company. In his years of doing the ACSI, Fornell says price is the least important. Second-most important is the quality of product of service.
"The one that's the most critical of all is rarely discussed," he said. "The fit between the customers specific needs and wants and what the company is offering." In other words, customization is king.
Dell began business selling made-to-order PCs. You could say there's been a correlation between Dell's customer satisfaction ranking and shift in the company's business model. As the PC industry has matured, as Dell became more popular as a brand, and the company's direct model moved toward offering more mass-produced computers, including now at mainstream retail.
A possible fix for Dell's service woes could lie in more customization, or better product targeting or segmentation. "If you have a good fit between buyer and seller, you have a high level of satisfaction," said Fornell.
Get up close and personal
Another way to improve could be to have more in-person support. Though online or remote tech support is cheaper and sometimes enough to fix a problem, face-to-face service could lead to more satisfied customers.
"A lot of their problems stemmed from, as they expanded rapidly and they tended to outsource their operations, they set up these call centers around the world. I don't think the service they were getting out of them was as good as it was before they did all this expansion," said Rosenfield.
Invest in quality
Of course, there's another way around all of these issues--the Maytag approach, or making products that don't break. Consumer Reports says that all PC companies, from Apple to Lenovo, see the same quantity of service calls generally.
It's a change the Japanese auto industry embraced two decades ago, and Fornell says the entire PC industry could benefit.
"They just made sure customers didn't have to go to dealerships for service and made cars very reliable," he said. "There would probably be a market for a more costly product if it could be demonstrated that it was more reliable and did not break."
What manufacturer wouldn't want that?
Updated at 1:50 p.m. PST with comments from Dell.
More changes are afoot at Dell. The Texas PC maker plans to shut down a Canadian call center and lay off almost 900 workers.
The Edmonton, Alberta, center in Canada will close during the second quarter to consolidate customer service operations. Most of the nearly 900 employees will receive pink slips, while some will be reassigned elsewhere in the company. In addition, Dell has decided not to open a second Canadian customer service center planned for Ottawa. In all, the company has 25 call centers worldwide.
The cuts "are part of the series of changes being made across the company globally to enhance the efficiency of our business," said Dell spokesman David Frink.
It's part of a plan Dell announced in May in which the company would reduce its workforce by nearly 10 percent, or about 8,800 jobs.
The world's second-largest PC maker said just a day earlier it would close all 140 of its U.S. stores in favor of focusing on its new strategy of selling its products through retail outlets like Best Buy, Wal-Mart, and Staples.
I used to think customer service and technical support were givens: you either did it well or failed in business. After all, if you don't support your customers, what have you got?
Now I'm not so sure. The multiyear trend of outsourcing service calls--primarily to India--seems to have consumers endlessly frustrated. The big question is: does it matter?
Conventional wisdom says we're frustrated because American jobs are being outsourced. But anecdotal evidence from my own personal focus group suggests that we may have gotten over the outsourcing thing, only to hit a snag on the support itself not being up to snuff. ... Read more
Concerned about what your customers say about you online? Well, you should be.
You probably think you have your bases covered by allowing product reviews and client testimonials through your Web site, but the truth is that the blogosphere can make (or break) you as a company if Google includes a customer's blog post in the SERPs (search engine results pages).
Prominently positioned customer blog posts in the SERPs that either love you or hate you can be more powerful than product reviews for several reasons, the most obvious one being that many blogs act as word-of-mouth advertising when things go right--and when they go wrong.
While some bloggers may have a reputation for always pointing out things that are wrong with the world, make no mistake about it: "acts of kindness" do get talked about, in a big way! You may have already overheard some of the positive buzz about Zappos, a fashion retailer of shoes and handbags, probably due in part to its free overnight shipping, very liberal return policy, and enthusiastic customer reviews. Here's a blog post you may not have heard about, "I Heart Zappos."
We all understand that sometimes bad things happen to good people, and Zaz LaMarr (the writer of the post) could be any one of us. In her post, she described how she purchased several pairs of shoes for her ill mother. Some didn't fit, but she didn't get around to returning them. Shortly afterward, her mom passed away and LaMarr still hadn't gotten around to mailing them.
When Zappos followed up on the shoes, LaMarr wrote back and explained the situation, ending with: "I'd send the shoes as soon as I could." Not only did Zappos arrange for UPS to pick up the shoes, but the company also sent a floral arrangement with condolences.
The result of Zappos' kindness? The customer that it treated like gold also happened to be a blogger with readership. Word of this good deed is spreading around the Web faster than the speed of a T-1 line, and her post is currently in position No. 12 in Google for "Zappos," and in position No. 9 in Yahoo.
Still not a believer that blogs are powerful? One commenter to her post declared, "I am going to go buy something from them and refer them to this post as the reason for my purchase. If only more companies acted this human."
What better way to build your reputation than to get back to basics and be nice to people?
On the flip side, some companies are earning their reputation as unfeeling, corporate giants. I can't think of another industry that has more problems with that image than the airlines. Search Google for "Spirit Airlines" and the No. 3 ranked result is a blog post headline that reads, "Do Not Fly Spirit Airlines."
What started out as a complaint over a $5 fee attracted a blogstorm; not only were several other horror stories relayed in the blog post's comments, but other posts like this one about the "Spirit Airlines Story" have attracted attention outside of the blogosphere in places like The Chicago Tribune, consumer complaint groups and more.
What was so bad?
Spirit CEO Ben Baldanza reacted to a well-written customer complaint letter by saying "Please respond, Pasquale, but we owe him nothing as far as I'm concerned. Let him tell the world how bad we are. He's never flown us before anyway and will be back when we save him a penny." The customer got ahold of the comment because Baldanza hit the "Reply to All" button.
Instead of apologizing or trying to deal with the situation in a better manner, Spirit Airlines blew off its customers and people reacted. While airline execs could have done something to resolve the issue, blogs don't seem to be important to them. Company spokeswoman Alison Russell was quoted as saying, "We wouldn't respond to a blog post. She goes on to say: "This goes back to the larger question of the veracity of everything you read on Internet blogs. Our customer service is great."
I'm sure you've heard the saying, "De Nile is a river in Egypt." How many travelers do you think are going to steer clear of Spirit Airlines after they read that damning post (in a No. 3 Google position)?
The lesson here, folks, is that the cliches you've heard about being kind to one another holds true--even (or especially) on the Internet.
The squeaky wheel doesn't always get the grease.
At least not if the squeaky wheel is a Sprint Nextel customer. On June 29, 2007, Sprint sent letters notifying some customers that their service would be canceled by the end of July due to excessive calls to customer service.
"Our records indicate that over the past year, we have received frequent calls from you regarding your billing or other general account information," the letter reads. "While we have worked to resolve your issues and questions to the best of our ability, the number of inquiries you have made to us during this time has led us to determine that we are unable to meet your current wireless needs."
"Therefore after careful consideration, the decision has been made to terminate your wireless service agreement effective July 30, 2007."
Subscribers who have gotten letters from Sprint terminating their service won't have to pay the early termination fee. Their account balances will also be set to zero. But subscribers will have to sign up with a new wireless provider by July 30 if they want to keep their phone numbers. Otherwise, the numbers won't be available after the Sprint service ends, the letter states.
(You can take a look at one of these letters posted within this discussion stream on a Sprint users' forum.) And click here to see an image of one of the letters.
The company's new tagline: 'Sprint Ahead.'
(Credit: Sprint Nextel)A Sprint spokeswoman acknowledged that a group of letters had been sent out on June 29. She said that only a "small minority" of customers were impacted.
"We have to be able to quickly and efficiently serve customers," said Roni Singleton, a Sprint spokeswoman. "And when we are unable to consistently solve our customers' problems it results in a lot of frustration and longer waits for other customers. So after looking through our records, we were able to determine that there were customers who we could couldn't meet their current needs."
Singleton said it was normal business practice for Sprint to audit customer service interactions. She also said the company has always reserved the right in its terms of use to terminate the contract for whatever reason.
Posting on the Sprint users' message board, one customer who received one of these letters said the calls she made to Sprint were for errors in the company's billing. She also questioned how the company counted the number of calls.
"I absolutely didn't call as much as they say I did, but I did always have the hang up/transfer scenario--even today calling in I was hung up on twice and transferred at least five times," she said in one of her posts. "I mean I DREAD calling in and sitting on hold, why on earth would I do it unless I had to!"
Clearly, Sprint is trying to shed customers who seem to eat up too many resources. But it seems crazy that a company that's already having a hard time keeping subscribers would be willing terminate contracts.
For years, Sprint has had a reputation for poor customer service and poor network coverage, and as a result, the company is suffering. For the first quarter of 2007, it reported a loss of 220,000 post-paid monthly subscribers--customers who pay monthly. This was the third quarter in a row the company had a substantial loss of these types of customers. The company has consistently had one of the worst churn rates in the wireless industry. At the end of the first quarter of 2007, Sprint reported a churn rate of 2.7 percent.
This issue has gotten me wondering about wireless contracts in general. If you are a Sprint customer who recently received one of these letters, or you've received a similar letter from another carrier, please write me at maggie.reardon@cnet.com.
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