Comcast is one of the worst companies in America according to Harris Interactive. In fact, Comcast’s customer service is so bad they are one of only three companies with such a high level of customer dissatisfaction. Comcast shares this dubious distinction with Halliburton and with financial companies that brought the economy to its knees in 2007, gaving us the worst recession since the Great Depression. Why is Comcast so awful and, more importantly, what can you learn from it?
Comcast provides cable television and high-speed internet service. Since there is only one cable coming into a home, they have an effective monopoly on cable service to certain neighborhoods and apartment buildings in the Seattle area. Their only real competition for high-speed internet service is DSL, which CenturyLink has the monopoly over in Seattle (again, there is only one phone line into a home). Effectively, there are only two choices for high-speed internet in Seattle—a bad situation for consumers, but a discussion for another time.
A close friend of mine has been having difficulty with his Comcast service. He is very busy, like most of us, and just wants his internet service to work. Comcast has always had sub par service, but he tolerated it until it started getting really bad lately. He’s been a customer of Comcast for over three years, but I suggested we look at other options while sitting on hold with Comcast customer service.
We found that Comcast charges significantly more than the “competition.” Nearly double, in fact. He is supposed to have 15MB service, but speed tests never show it more than 7MB (and often much lower). Signal is also lost quite often. He suspects this is the modem since it’s over three years old. When we finally speak to a customer service representative we are told there is nothing they can do to help, though they suggested we speak to a retention specialist.
This is a person who is supposed to keep him as a Comcast customer. Every business owner knows that retaining an existing customer is far cheaper than acquiring a new customer. Comcast has no doubt done the math. I am guessing, but I suspect that an average customer over a two year period with Comcast brings in about $1200 for the company, so you would expect Comcast to spend at least $120 to retain my friend as a customer (especially given he has already been a customer for over three years).
Instead, a shocking thing occurred. The retention specialist said that because he had been a customer for so long, it would be difficult to try to resolve the issues he is experiencing now. Basically, his loyalty to Comcast was rewarded with the comment that he was too loyal. Comcast would not replace his modem, though they would send out a technician to look at the poor service, but the Comcast representative made it clear that regardless of whether the problem was with Comcast or the modem, my friend would be responsible for the fee associated with calling out a technician.
We even escalated the issue with [email protected]. They responded quickly, apologized about the problems, and asked for the account number (which was provided in the original email). We sent it again and after three follow-up emails to them over two weeks, we never heard back until we finally called to cancel the service. Then they called and stated the exact same thing as the previous representative—no new modem, no service credit to recoup purchasing a new modem, and no technician unless he wanted to pay for one to come out. In other words, they would do nothing to retain my friend as a customer.
Sadly, this is not an unique story with Comcast. That is why Comcast is ranked as one of the worst companies in America. You can learn a lot from Comcast’s poor service and terrible reputation. Even though Comcast continues to grow financially, because of their poor customer service they have a high turnover of customers. They would actually perform even better if they treated their customers better. They would also lower their customer acquisition costs by retaining their current customers instead of driving them away (cell phone carriers are a great example of companies that do this well, though they are not loved by consumers much either).
Understand what a customer is worth to you. DirecTV knows this number and is willing to offer incentives to gain new customers (those $100 deals for signing up a friend are more than worth it for them). They are also good at keeping existing customers happy because they know it is far cheaper than getting a new customer to replace the one they lost. I am willing to spend thousands to acquire a new client because I know that they will not only love us and our services, but I know how much an average client spends with us over their years as our client. Comcast does not offer incentives to retain existing customers because they lose so many from their poor service making it too costly for them.
Even if your business’ reputation is not stellar right now, it can be fixed. DirectTV used to have a terrible reputation and they turned it around by treating their customers well, responding to their complaints, and proving great service. Besides, I doubt your reputation is nearly as bad as DirecTv’s was or as bad as Comcast’s is. You too can realign your business values to attract customers by treating them well and providing stellar service. You will not only save money, but you are likely to gain new clients simply from great word of mouth. Don’t be a Comcast.