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Customer service issues that are handled by a computer automated response system (ARS) on the telephone generate significantly lower customer care ratings when compared with issues handled by a live representative, according to the J.D. Power and Associates 2007 Wireless Customer Care Performance StudySM —Volume 1.

Now in its fifth year, the semi-annual study provides a detailed report card on wireless provider customer care performance based on customer experiences with three point-of-contact methods: telephone calls with a service representative and/or automated response system (ARS); visits to a retail wireless store; and online Internet connection. Within each contact method, processing issues such as problem resolution efficiency and hold-time duration are also measured.

Overall, customers who speak with a service representative on the telephone provide an average index score of 127 points, which is significantly higher than the industry average of 98 points. However, customers contacting their carrier with a problem or inquiring through an ARS system rate their experiences significantly lower, averaging 92 index points. The index score drops even further (to 73 points) for contacts made over the Internet.

“One of the main factors contributing to this performance disparity is the quality of the response that is given,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. “A service representative—either over the phone or in person—has the ability to answer customer questions and clarify answers. This flexibility is very limited in both ARS and Internet contact methods.”

In addition, scores for the ARS contact method have decreased 5 percent to 92 index points in overall performance when compared to the most previous reporting period six months ago (97 points). The largest declines were reported for customers experiencing too many prompts before getting to the desired menu and the lack of relevant menu options available to address the customer’s inquiry.

“As more companies strive to save operating costs by encouraging customers to contact Internet- and computer-based customer service programs, they run the risk of increasing the rate of customers who will switch carriers, especially as the number of contacts needed to resolve issues rises,” said Parsons. “Since future churn levels are four times as high among those who rate their wireless carrier below average in customer care, the challenge for wireless providers is to offer an easy and efficient customer care transaction experience.”

For a fifth consecutive reporting period, T-Mobile ranks highest among the five largest wireless service providers by creating a positive experience among customers who contact the carrier for service or assistance. With an index score of 107 points, T-Mobile performs well across all factors that determine overall satisfaction, particularly in the ARS and retail contact channels, and in the overall hold-time duration on the phone. Verizon Wireless (101) and Alltel (99), respectively, follow T-Mobile in the rankings.

The study also finds several key wireless customer care patterns:

* More than one-half (55%) of wireless users have contacted the customer service department for assistance within the past year, marking a nearly 7 percent decline from the most recent reporting period (July 2006).
* The average number of contacts necessary to resolve an inquiry by phone is 1.87—up from 1.76 in the previous reporting period.
* Among customers who contact their provider, 73 percent do so by telephone and 24 percent do so through their provider’s retail store. E-mail/Internet accounts for only 3 percent of customer contacts.
* The average initial reported hold time on calls to the customer service department is 3.58 minutes. In comparison, it takes an average of 8 minutes before speaking in-person to a representative at one of the provider’s retail stores.
* More than four in 10 customers (42%) contact their provider with a billing-related service inquiry, with 55 percent of these contacts attributed to inaccurate charges. Additionally, 30 percent of all customer care inquiries are call-quality related.

The 2007 Wireless Customer Care Performance Study—Volume 1 is based on responses from more than 13,970 wireless customers who contacted customer care within the past year. The results are from the past two reporting waves, conducted in June and September 2006. The 2007 Volume 2 report will be issued in July 2007.

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The percentage of wireless calls being made and received inside buildings, such as at home and work, now exceeds those made outside, impacting the overall rate of customers experiencing a wireless call quality problem, according to Volume 2 of the J.D. Power and Associates 2006 Wireless Call Quality Performance Study released today.

The study measures the number of problems experienced with wireless call quality on a semi-annual basis. Call quality is based on seven customer-reported problem areas that impact overall carrier performance. They are: dropped/disconnected calls; static/interference; connection on first try; voice distortion; echoes; timely voice mail notification; and timely text message notification.

The study finds that 51 percent of all wireless call transactions are generated indoors—an increase from 47 percent in 2005. The biggest increase of wireless calls indoors has been in homes, where 29 percent of all wireless calls are placed—up from 27 percent in 2005. Conversely, the percentage of wireless call transactions made in vehicles has decreased from 31 percent in 2005 to 27 percent in 2006.

More importantly, as calling patterns shift, the rate of problems with call quality is impacted, depending on where the wireless call is made or received. For example, wireless calls within a local calling area result in significantly lower problems per 100 calls (PP100) compared to calls placed or received while roaming—20 PP100 and 37 PP100, respectively. A lower PP100 score is better, as it means fewer problems experienced with call quality. Additionally, indoor wireless calls typically result in fewer problems when compared to calls placed outside as the frequency of use rises, particularly those made while driving in a car.

“It is clear that carriers need to manage their networks to reflect the specific usage patterns of their customers in order to provide the best possible call quality experience,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. “While wireless providers have made great strides in improving the quality of calls, there appears to be an opportunity to provide better service in those calling situations where there is a higher incidence of quality problems, such as when roaming or driving.”

Verizon Wireless ranks highest in three of the six U.S. regions included in the study. Alltel and T-Mobile rank highest in two regions, while U.S. Cellular ranks highest in one region.

“With an increasingly competitive environment and an increase in the number of services used in conjunction with a cell phone, carriers that offer superior network quality will improve their likelihood of attracting new customers and will increase customer retention,” said Parsons. “In fact, improving network quality is a beneficial financial incentive for wireless carriers, as customers experiencing at least one call quality problem are three times more likely to indicate they ‘definitely will’ switch carriers in the future.”

Study results by region are:

Northeast Region: Verizon Wireless ranks highest for a third consecutive reporting period. Verizon Wireless performs well due to fewer problems experienced with static/interference, dropped/disconnected calls, initial connections, voice distortion and echoes.

Mid-Atlantic Region: Verizon Wireless ranks highest, outperforming the regional average in initial connections.

Southeast Region: Alltel, T-Mobile and Verizon Wireless rank highest in a tie. Alltel customers report fewer problems with text mail notification, drops/disconnects and voice distortion. T-Mobile performs well due to fewer problems experienced with static and echoes. Verizon Wireless customers report fewer problems with voice distortion and drops and disconnects.

North Central Region: U.S. Cellular ranks highest for a second consecutive reporting period with fewer problems for static, initial connections and timely text message notification..

Southwest Region: Alltel ranks highest in this region for the first time, with customers reporting fewer problems with echoes and timely voice message notification.

West Region: T-Mobile ranks highest for a second consecutive reporting period in this region, performing particularly well in initial connections and have fewer dropped/disconnected calls.

Volume 2 of the 2006 Wireless Call Quality Performance Study is based on responses from 27,151 wireless users. Respondents were surveyed in March-April and June-July 2006.

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The overall rate of customers experiencing a wireless call quality problem has declined for a second consecutive year, with reported problems per 100 calls (PP100) reaching the lowest level since the inaugural study in 2003, according to Volume 1 of the J.D. Power and Associates 2006 Wireless Call Quality Performance StudySM released in March.

The study, now in its fourth year, measures the number of problems experienced with wireless call quality on a semi-annual basis. Call quality is based on seven customer-reported problem areas that impact overall carrier performance. They are: dropped/disconnected calls; static/interference; connection on first try; voice distortion; no echoes; no immediate voice mail notification; and no immediate text message notification.

The study finds that the percentage of wireless calls with at least one problem has declined from 26 PP100 in 2005 to 24 PP100 in the 2006 study—an improvement of 8 percent. The number of wireless calls that involved a problem also declined by 15 percent when comparing the 2004 (30 PP100) and 2005 studies. A lower PP100 score is better, as it means fewer problems experienced with call quality.

In addition to the decline in overall call quality problems, considerable improvements have been made in the areas of dropped/disconnected calls and calls with voice distortion. The number of dropped/disconnected calls has decreased by 15 percent when compared to the 2005 study. The number of calls experiencing voice distortion, which occurs when voice patterns become inconsistent due to problems with digital frequency, has decreased by 25 percent when compared to 2005.

“It’s clear that wireless providers have made great strides in improving the quality of calls, especially in those areas that impact customer churn the most, such as calls that are dropped or disconnected,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. “With an increasingly competitive environment and an increase in the number of services used in conjunction with a cell phone, carriers that offer superior network quality will improve their likelihood of attracting new customers and will increase customer retention. In fact, improving network quality is a beneficial financial incentive for wireless carriers, as customers experiencing at least one call quality problem are three times more likely to indicate they ‘definitely will’ switch carriers in the future.”

The study also finds that overall call quality performance varies based on where a call is placed or received. Wireless calls within a local calling area have significantly lower PP100 ratings when compared to calls placed or received while roaming—27 PP100 and 55 PP100, respectively. Additionally, outdoor wireless calls typically experience less problems when compared to calls placed inside of buildings, particularly those made from home. “It is clear that carriers need to manage their network to reflect their specific customer’s usage patterns in order to provide the best possible call quality experience,” said Parsons.

T-Mobile and Verizon Wireless rank highest in five of the six U.S. regions (including one tie) included in the study. T-Mobile and Verizon Wireless both perform particularly well in the areas of initial connections, dropped/disconnected calls and voice distortion. U.S. Cellular is the only other carrier to rank highest in a region (North Central).

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Wireless users who have problems or issues with service need to contact their current provider more often than in the past in order to resolve the inquiry, according to the J.D. Power and Associates 2006 Wireless Customer Care Performance StudySM – Volume 1 released today.

The study, in its fourth year, now provides a detailed report card on a semi-annual basis of wireless provider customer care performance based on customer experiences with three point-of-contact methods: telephone with a service representative and/or automated response system (ARS); walk-in at a retail store; and online Internet connection. Within each contact method, processing issues such as problem resolution efficiency and hold-time duration are also measured.

The study finds that wireless customers contact their provider an average of 1.94 times by phone to resolve an issue or problem—the highest level since measurement began in 2000. Since that time, the average problem resolution frequency (PRF) rate has steadily climbed.

In 2000, the average PRF rate was 1.36—a yearly increase of 14 percent. The main factors contributing to this increase in resolution frequency are not only the rise of new wireless services and products that are available, but also the complexity of using those products. Now customers can capture still pictures or video, download ring tones, play MP3 files, and even watch TV clips. This, in turn, puts pressure on the carrier’s service representative to understand the issue or problem and try and get the inquiry resolved in a timely manner.

“As more wireless companies encourage customers to try new services, it’s becomes more difficult for the customer service representatives to be fully trained and kept apprised on the latest products being introduced. The downside is the carrier runs the risk of decreasing customer satisfaction and losing customers to other carriers,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates.

“Since future switching levels are three times as high among customers who need to re-contact the carrier two or more times to get the inquiry resolved, the challenge for wireless providers is to provide contact channels that can offer an informative and efficient experience for their customers.”

For the third consecutive reporting period, T-Mobile ranks highest among the five largest wireless service providers in creating a positive experience for customers who contact their providers for service or assistance. With an index score of 108, T-Mobile performs particularly well across all factors, especially among the contact channels of customer service representatives, ARS and walk-in retail experience. ALLTEL and Verizon Wireless follow T-Mobile in the rankings in a tie, performing significantly above the industry average (104).

The study also finds several key wireless customer care patterns:

More than one-half (52%) of wireless users have contacted the customer service department for assistance within the past year, a slight decrease from 2005 (54%).

Among those who contact their carriers, 71 percent do so via telephone and 25 percent through their carrier’s retail stores. E-mail/Internet contacts account for only 4 percent.

The average initial reported hold time on calls to the customer service department is 3.57 minutes—an increase from 3.44 in 2005. In comparison, it takes, on average, more than 9 minutes before speaking to a representative at a retail store.

More than four in 10 users (42%) contact their carrier with a service inquiry that is billing related, one-half of which are due to incorrect charges. An additional one-third of all customer care inquiries are call quality related.

The 2006 Wireless Customer Care Performance Study-Volume 1 is based on responses from more than 11,490 wireless users who contacted customer care within the past year. The results are from the past two reporting waves, conducted in July and October 2005. The 2006 Volume 2 report will be issued in July 2006.

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Responding to petitions from consumer advocacy groups, the Federal Communications Commission expanded its rules Thursday to create more consumer-friendly wireless bills. Those consumer agencies, however, quickly found fault with the actions.

The government agency now requires “billing descriptions be brief, clear, non-misleading and in plain language”. The Commission also stated that bills may be considered misleading if discretionary line items are combined with tax or government-mandated fees. Finally, the agency is requesting comment on the distinction between government-mandated and other charges and whether those charges should appear in a different section of the bill.

In a statement issued after the FCC’s action, Chairman Michael K. Powell said, “Wireless consumers deserve accurate, meaningful billing information in a format they can understand.”

At least one consumer group, the National Association of State Utility Consumer Advocates, found fault with the FCC’s actions. “This is a lose-lose for America’s consumers,” said David Bergmann of the Office of the Ohio’s Consumer Council and chairman of the organization.

His statements were echoed by many other advocates, including Janee Briesemeister of Consumers Union, who claimed more than 18,000 consumers had commented on the issue and said, “No matter how the agency spins this decision — it is anti-consumer.”

Consumer groups had lobbied the FCC to ban charges that falsely implied they were made due to government regulations. The groups said that these fees are typically excluded when wireless companies advertise and promote their price plans.

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