IP Democracy: Customer Service is Key in Battle of the Bundles

The New York Times’ Ken Belson has this piece today about the growing rivalry between phone companies and cable operators. The article focuses mostly on one nice and often overlooked benefit of competition: improved customer service. It’s gratifying to switch communications providers if customer service stinks.

One customer, Joe Bender-Zanoni, just up and switched to Cablevision for voice service when repeated calls to Verizon didn’t fix his phone problems.

“Sheer anger led me to Cablevision,” he said. “Once I got aggravated with the phone company, I looked at their triple play. They actually answer their phones.”

Although price is a big variable in competition, customer service is often overlooked as a motivation for choosing providers. Anger over unanswered phones or botched installs can drive a $120/month customer into the arms of a competitor, no matter what the comparative cost of service is.

That’s why both cable and phone companies are putting greater emphasis on keeping customers happy, even if improved customer service eats into the bottom-line.

Cable and phone companies do not disclose how much they spend on customer service. But keeping customers happy is not cheap. Companies often find it hard to quantify how service contributes to the bottom line. So executives walk a fine line between spending on services with uncertain results and trimming budgets when times get tough, hoping customer complaints do not rise.

Posted by Cynthia Brumfield on August 26, 2006 8:42 AM to IP Democracy