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Poor Service At Carrier Stores Leads To Fewer Wireless Renewals

The worse consumers’ retail experiences are at carrier-owned stores, the more likely they are to switch wireless providers, is the lesson coming from a recent study by J.D. Power and Associates.

The study found that 20 percent of subscribers who are not satisfied with the overall retail purchase experience claim they will “probably” or “definitely” switch current carriers with the next 12-month period. This is up from 13 percent in 2004. Also, dissatisfied customers are 25 percent less likely to visit the same carrier store again to buy wireless services.

With fewer new customers entering the market, the wireless industry is becoming fiercely competitive for retails, said Kirk Parsons, wireless services senior director at J.D. Power, the global marketing firm based here. “The retail stores of wireless carriers face strong competition in the areas of price and promotions from national electronic retail outlets, such as Best Buy and RadioShack.”

Ranked the highest and tied for first place in customer satisfaction were T-Mobile and Verizon Wireless, the only carriers that performed above the industry average. ALLTEL, Nextel, Cingular and Sprint PCS all fell below the bar (see chart).

The study assessed customers who had a wireless retail sales buying experience within the past six months. It measured overall customer satisfaction and performance of the retail store based on, in order of importance: sales staff, price/promotion, store display and store facility.

J.D. Power suggested several reasons for rising customer dissatisfaction with carrier-owned stores. For one, the reported average transaction time increased by eight minutes year-over-year, to 70 minutes. Also, retail satisfaction decreased among customers who felt they were pressured during the sales process. The average overall satisfaction rating among customers who reported feeling no pressure was 98 percent. When customers reported that they felt pressured in some way, their satisfaction rating plummeted to 68 percent.

This is the second consecutive year that J.D. Power has conducted the study.