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July 28, 2011

Study Finds Vast Differences in Wireless Customer Satisfaction between Contract and Non-Contract Customers

By Tracey E. Schelmetic, TMCnet Contributor

Chances are good your answer will vary widely depending on whether you are a contract customer or a non-contract (“pay as you go”) customer, according to new research from J.D. Power & Associates.

If you're like me, you guessed that people who were NOT tied to a contract liked their carriers better, being footloose and fancy free and able to disengage from the carrier at will. Wrong, in fact. Customer service satisfaction is far higher among contract-based customers than those who subscribe to prepaid or non-contract service plans, according to the studies, called the “2011 U.S. Wireless Customer Care Performance Full-Service Study –Volume 2” and the “2011 U.S. Wireless Customer Care Performance Non-Contract Study –Volume 2,” which were both released today.



Among customers who sign a contract for wireless service, overall customer care performance averages 761 out of a possible 1,000 – 23 index points higher than the average satisfaction among non-contract subscribers (which was 738). One of the main factors contributing to this performance disparity is that customers with wireless service contracts are often connected to a live customer service agent faster and more often than non-contract customers, who report longer hold times than contract customers do when waiting to speak to an agent (4.4 minutes for contract versus 5.5 minutes for non-contract customers.)

“It is not unexpected that hold times are shorter for contract customers, since full-service providers generally have access to existing account information that helps identify the customer immediately once contact is made,” said Kirk Parsons (News - Alert), senior director of wireless services at J.D. Power and Associates. “There is also a disparity between the contract and non-contract segments in terms of the quality of the experience with the service representative. In particular, non-contract customers are considerably less satisfied than are contract customers in the areas of knowledge about plans; personal concern for customers; and apathy towards customers.”

While Parsons says that treating customers with respect by personalizing the transaction should not differ among customers in each segment, regardless of their tenure or the monetary value to the provider, it's easy to believe that this disparity is fairly common practice. Contract customers probably represent higher revenue customer relationships. Non-contract customers are also, not surprisingly, less loyal: they are 2.5 times more likely to change provider.

The J.D. Powers studies also ranked the quality of customer service provided to wireless subscribers, and Verizon came out on top. Verizon ranked highest in wireless customer care performance among full-service providers with an overall score of 770. T-Mobile (News - Alert) follows in the overall rankings with a score of 766.

Boost Mobile ranked the highest in overall customer care satisfaction among non-contract service providers, with an overall score of 763.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.


Tracey Schelmetic is a contributing editor for TMCnet. To read more of Tracey's articles, please visit her columnist page.

Edited by Jennifer Russell
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