Bundling Keeps Hold Of Unsatisfied ISP Users


People are growing slightly less satisfied with their residential high-speed Internet providers, yet they are less reluctant to change thanks to bundling of services and industry inertia and commoditization.

According to J.D. Power and Associates' 2010 Internet Service Provider Residential Customer Satisfaction Study, overall satisfaction with high-speed Internet service companies is 634 on a 1,000-point scale. That's a decrease of five index points from last year's study. Consumers' satisfaction with the cost of service in 2010 averaged 584, down 12 points from 2009.

Neither of those drops is "statistically significant," but they do point to people taking a wait-and-see attitude about the future, particularly if they get other services (say telephone or television) from their provider as well, says Frank Perazzini, director of telecommunications for J.D. Power.



"As the product moves toward commoditization, price and performance become the two drivers of satisfaction," Perazzini tells Marketing Daily. "Performance has grown steadily equal; outages are better, speeds are better. With that dynamic, price [moves] to the forefront of satisfaction."

Additionally, the satisfaction gap between DSL customers and cable modem customers narrowed by 8 index points between 2009 and 2010; the gap currently stands at 17 (638 vs. 621, respectively). Market competition may also breed greater satisfaction: according to the study, overall satisfaction for those who had only one choice for Internet service averaged 556, compared with 653 for those with three options and 665 for those with five options.

While people who give low ratings to their ISP companies are most likely to switch, the intention to do so remains unchanged between 2009 and 2010, and the percentage of people who actually switched declined one percentage point. And the percentage of customers who actually switched providers (for reasons other than moving) declined by more than 25%, compared with 2009.

"Bundling is a factor in keeping people from churning," Perazzini says. "So, we've got people entrenched with what they have right now, considering their options or waiting for great promotions."

Or, they're waiting for a technological breakthrough, which could come from the wireless industry, as 4G becomes more prevalent, meaning consumers could opt to have all of their Internet services come from their wireless carriers.

Next story loading loading..