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Moaning and moving on

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14th Mar 2007
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By Stuart Lauchlan, news and analysis editor

We all like a good moan about customer service and especially about poor customer service. More than that, we all like to think that when we tell that hapless call centre agent that this is the last straw and we’re going to ditch whatever company we’re complaining about that we’ll actually follow through. But how many of us do?

Actually it’s possibly more than we think. Last year more than four million people switched energy supplier, according to watchdog Ofgem, saving an average £150 a year. But millions of others stick with expensive deals that, according to comparison service simplySwitch.com, costs customers around £3.25 billion a year. So are providers relying on customer apathy as a core plank of their customer management strategies?

The broadband industry is a good case in point. Ofcom, the UK body that regulates and oversees the telecommunications industry, says it received 26,926 broadband-related complaints from consumers in a 10-month period last year. A common complaint is from people who think they are signing up to faster broadband services are getting substantially slower connections than the top advertised speeds.

According to online broadband news and information site Think Broadband, the average UK broadband download speed is now 2Mbits/sec, up from 512Kbits/sec three years ago. But many users say their connection is consistently and significantly slower than the advertised speed.

Most ISPs include a clause in their terms and conditions that say services will reach speeds of ‘up to’ the advertised figure – meaning that the advertised speed is a theoretical maximum rather than an average.

Broadband analyst Point-Topic found that among consumers it surveyed, one in four say they are thinking of changing suppliers up from one in ten in 2005. Point Topic quizzed respondents in a number of different categories of user satisfaction, including speed of service, billing clarity and value for money. Of particular note was the change in users who reported being 'very' or 'fairly' dissatisfied with the 'after sales support' which went from 7 percent in Feb 2006 to 18.3 percent in Dec 2006.

Better value for money

"The change since our last survey is striking," says Dr Katja Mueller, research director at Point Topic. "Within 10 months the satisfaction levels have declined significantly. From 92 percent of respondents saying they were 'very' or 'fairly' satisfied in February 2006 with the service they receive overall, it has dropped to 77 percent in December 2006.

“It suggests that many ISPs are focusing on the rush to gain market share in a rapidly consolidating market at the expense of customer service. In the long-run they may pay dearly for this neglect. With 25 percent of respondents telling us that they were ready to churn, ISPs may have their work cut out trying to keep hold of their hard won customers.”

Unhappy customers – and clearly they’re hardly difficult to find - can get seven times better value for money than a year-and-a-half ago, according to simplySwitch.com. According to the firm, customers moving providers can expect a far better deal than if they signed a contract 18 months ago.

The company analysed broadband deals' speed vs cost to arrive at a '£ per Mb' measure and said that as competition had heated up over the past 18 months, every provider had shown a vast improvement. It found that 18 months ago, customers were paying an average of £17.35 per Mb, compared to £2.62 per Mb today.

This means that customers should now be able to find an up to 8Mb deal for around £21 per month, whereas in July 2005 they would have only been able to find an up to 1Mb or 2Mb deal for the same money.

“The broadband market is incredibly competitive, but even we were surprised at how much it's changed in a relatively short period,” says Karen Darby, chief executive of SimplySwitch “Only 18 months ago, broadband was fairly expensive and only available up to 2Mb. Connections are now available up to four times faster for an average of just £21 per month. Thousands of people who have been on the same deal for a year or more could switch to much faster connections and save money in the process.

“With the broadband market developing so quickly, we would like to see customers on rolling contracts that can be terminated at any time without penalty. At the moment, customers can be locked into broadband deals for as long as 18 months. We've seen how much the market can change during that period. If broadband continues developing at its current rate, 32Mb could be the norm in 18 months time.”

Good news?

So good news all round for consumers, yes? Well, up to a point. Providers are ready to fight back to hang on to customers. For example, last November Orange announced it was to impose a £12 charge on customers who made a repeat request for the Mac code needed to change suppliers.

The Mac - migration authorisation code – is a type of personal pin number that consumers need for a quick transfer between companies. When you want to switch broadband you need to get the Mac from your current provider and give it to the new company. The Mac also allows you to use your existing broadband connection during the switching process. Without it, customers have to do without broadband while the new connection is set up.

Until as recently as earlier this year, Macs have been issued under a voluntary agreement by the industry, which leaves customers powerless if the switching process is dragged out.

But now Macs are mandatory and must be sent out when asked within five days. Once the new provider receives the Mac they must try to switch the customer to their service within 30 days and inform them of the exact date that they will be connected.

So will broadband providers wake up to the new customer management challenge they face and put in place strategies and policies that actively encourage users to stay where they are? Or will they focus their attentions on coming up with ways of forcibly preventing them from defecting? On the evidence of their performance to date, it's difficult to be too optimistic...

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