We’re roughly one year removed from the reintroduction of unlimited usage plans by Verizon Wireless and AT&T in an attempt to slow the subscriber losses both brands weathered in the first quarter of 2017. Additionally, we continue to see aggressive pricing and promotional offers in a saturated market that is focused on providers “stealing” customers from one another. Not surprisingly, the J.D. Power consumer wireless customer satisfaction index is at an all-time high.
In our most recent consumer wireless study, the percent of customers who have unlimited data plans has risen to 36%, up from 23% a year earlier. The increase is notable because overall satisfaction rises as monthly data allocations increase, peaking among customers with unlimited data plans. According to our research, customer satisfaction gains in the Cost of Service factor have outpaced all other wireless experience factors, helping fuel the overall gain in satisfaction. In short, customers are winning!
Unlimited data plans increase the perception of value considerably. Cost of Service satisfaction is 44 points higher among customers with unlimited data, compared to those with data allowances (810 vs. 803, respectively, on a 1,000-point scale). The high-value proposition of an unlimited plan has a halo effect on satisfaction in other factors. For example, Account Management satisfaction is 19 points higher among those with unlimited plans than among those with data allowances (816 vs. 797, respectively), and Device satisfaction is 23 points higher (862 vs. 839). Overall satisfaction is 21 points higher among customers with unlimited data plans than among those with data allowances (808 vs. 787, respectively).
Despite their propensity to use resource-intensive functions on their phones, customers with unlimited data plans experience fewer overall network problems than those with data allowances (11 Problems Per 100 and 13 PP100, respectively). Additionally, unlimited data customers experience fewer data problems than that of customers with data allowances (15 PP100 vs. 17 PP100). These numbers reflect the high perceived value of the unlimited plans.
Interactions Go Digital
Unlimited plans aren’t the only thing benefiting consumers. Wireless providers are engaging with customers via self-service channels that are simpler and easier than ever before, which is another key driver in customer satisfaction.
As it relates to customer service and purchase experience, digital channels are becoming increasingly important. In our customer service study, customers who engaged via social media were more satisfied than customers who engaged via any other channel. And in our purchase experience study, customers who made purchases via their smartphone were more satisfied than those purchasing via any other channel, including in-store. Satisfaction is 857 (on a 1,000-point scale) for device purchases made via smartphone, 842 in-store, and 836 among those who used the telephone.
Wireless carriers are interacting via digital channels in the way many of their younger consumers and tech-savvy consumers want, and the providers who can optimize the digital experience and continue to drive customers to digital channels, both for customer service and sales, will be at a significant advantage. Millennials, for example, are an ever-important segment with tremendous buying power and many of them grew up with smartphones in their hands. It’s what they’ve always known, and they’re more comfortable than older generations (i.e., Boomers) with leveraging that smartphone for important purchases.
Sweetening the Pot
While AT&T and Verizon Wireless don’t appear to be willing to chase T-Mobile and Sprint on price, industry observers are keen to see how the market develops from a value-add offer perspective. In particular, we’ll be keeping a watchful eye on customer satisfaction as it relates to inclusion of video services with wireless subscriptions. Customer-friendly offers are on the market today linking T-Mobile and Netflix, AT&T and HBO, AT&T and DirecTV (and DirecTV Now), and Sprint and Hulu. Early signs indicate that these types of bundled packages are resonating with customers.
This kind of competition is good for the consumer. But, with so much of customer perception of quality and value now contingent on having unlimited data and a number of other perks, one does need to wonder where the wireless industry will go from here to keep upping the ante on customer satisfaction.
The trend is analogous to what J.D. Power has been seeing in the automotive industry, where new-vehicle quality has been improving consistently for 30 years, recently reaching its highest level in history. As the overall quality of the product and functionality of the technology continues to increase, top performers set themselves apart by consistently delivering superior customer experiences. We’re seeing that in virtually every industry J.D. Power evaluates. Increasingly, that will become the battleground for wireless supremacy as well. Finding that right balance between network quality, unlimited access, customer-focused service, and value-added features and benefits is where wireless companies need to focus if they want to keep all of the customers they’ve been trying so hard to steal from one another for the last two years.
Peter Cunningham is the Technology, Media, & Telecommunications Practice Lead at J.D. Power. He oversees the practice’s industry benchmark studies, proprietary research, consulting, and performance improvement programs focused on improving customer experiences. Mr. Cunningham has 16 years of experience in strategic planning, product development, technology innovation, operational transformation, and customer experience optimization. Prior to joining J.D. Power in 2017, Mr. Cunningham was vice president of Corporate Initiatives & Development at Time Warner Cable. Previously, he was a management consulting executive at Accenture. Mr. Cunningham earned a bachelor’s degree in broadcast journalism from the University of Missouri.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by Fierce staff. They do not represent the opinions of Fierce.