Wednesday, October 10, 2007
American Express Tops Credit Card Satisfaction Survey
JD Power's first
report on credit card satisfaction is out, and the market research company says
American Express had the highest satisfaction ratings among U.S. consumers.
Ten different credit cards were studied across five factors. Power assigned different weights to ratings. The methodology resulted in "benefits and features" being deemed eight times more valuable than "resolution".
Discover Card came in a surprisingly strong second place, finishing only 7 points behind
Amex on a 1,000 point scale.
Power also found that consumers who pay the full balance on their card each month valued rewards more while those who carry a balance naturally found lower interest rates and fees more valuable. The study also finds that rewards are key in credit card selection across the industry, and 80 percent of card holders receive some type of reward with their credit card usage.
While rewards programs are important to many credit card customers, some are also attracted to credit cards that offer lower interest rates and no annual fees. The study finds that customers of Discover,
WaMu and Wells Fargo frequently cite “no annual fees” as the reason they selected their card. In addition, 84 percent of Wells Fargo card holders also use Wells Fargo as their primary bank.
“It’s important for credit card issuers to communicate to their customers all of the benefits their card has to offer,” said Taylor. “Customers who are aware of and use their card benefits are generally more satisfied with their issuer.”
Among the credit card networks, customer satisfaction with American Express and Discover is significantly higher than with MasterCard or Visa. However, 89 percent of Visa customers and 87 percent of MasterCard customers indicate that their card is accepted everywhere they want to use it, while only 17 percent of American Express and 19 percent of Discover customers say the same. MasterCard holders have slightly higher satisfaction than those with a Visa, which is primarily driven by higher satisfaction with membership benefits.
Labels: American Express, credit card, Discover Card, J.D. Power
Tuesday, June 19, 2007
We're Keeping Cell Phones Longer. Motorola, Sanyo Top List As Prices Drop; JD Power Study
The average reported length of time a customer owns their cell phone has increased by 5 percent since fall 2006, according to the J.D. Power and Associates 2007 U.S. Wireless Mobile Phone Evaluation Study.
The study finds that customers are keeping their mobile handsets for an average of 17.5 months—an increase from 16.6 months since the last reporting period (November 2006).
This marks the first increase in the reported ownership cycle since 2002, when the average was 18.4 months. The increase in ownership tenure is roughly equal across major handset brands.
“One possible reason for this significant increase in the length of handset ownership is that more customers are initiating or renewing their service contracts for a longer period—typically for two years, as opposed to just one year, which was customary a few years ago,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. “While these longer contracts help wireless carriers recover the costs associated with offering subsidized cell phones, customers tend to hold on to their current cell phones longer to avoid termination fees when switching service, which may ultimately lead to lower renewal rates.”
The study also finds that
the price a customer pays for their wireless mobile phone has dropped from an average of $103 in 2002 to $93 in 2007. The decline is primarily due to discounts given by handset providers and wireless service carriers to incentivize sales. Currently, 36 percent of customers report receiving a free mobile phone when subscribing to a wireless service—up considerably from 28 percent in the 2002 study.
“It’s clear that wireless service carriers are using mobile phones as bait to increase consumer traffic, applying discounts either through rebates or free limited-time offers,” said Parsons. “The problem with this strategy is that, in most cases, the discounted handsets being offered are older models, which typically lack the latest technological advancements or desired design features.”
The study measures customer satisfaction with wireless handsets by examining five key factors. In order of importance, they are: physical design (24%); operation (22%); features (20%); handset durability (19%); and battery function (15%).
Motorola and SANYO tie to rank highest in overall customer satisfaction with wireless cell phones. Motorola performs particularly well in the physical design, operation and features factors, while SANYO receives high ratings in operation and battery functionality. Following Motorola and SANYO in the rankings and performing above the industry average are Samsung and LG, respectively.
The study also finds several key wireless handset usage patterns:
* Sixty-nine percent of all cell phones owned are a clamshell design—an increase of 19 percent from 2006. This compares to 29 percent for the candy-bar style, and 2 percent for the slide-cover design.
* Handset features that are used most frequently include: speakerphone (51%); camera capabilities (35%); services to send/receive short messages (22%); and gaming (16%).
* More than one-half of all current wireless users compared other handset brands before selecting their current wireless phone. Those customers who compare phones during the selection process are more likely to be satisfied overall with their current handset than those who do not.
Labels: J.D. Power, Motorola, Sanyo, wireless
Thursday, March 15, 2007
Price, Quality Drive Photo Printer Purchase, Power Finds
When shopping for a photo printer, 25 percent of consumers indicate price is the most important reason for purchasing a specific brand, followed by printer quality, according to the J.D. Power and Associates 2006 Photo Printer Customer Satisfaction Study.
The inaugural study measures customer satisfaction with photo printers based on five factors that drive overall satisfaction: performance, appearance, connectivity, ease of use and cost. When examining photo printer performance relative to the drivers of overall satisfaction, Kodak and Lexmark perform particularly well among printer brands.
"Price and quality play a critical role in the purchase decision and also have a considerable impact on overall satisfaction once the ownership experience begins," said Steve Kirkeby, executive director of telecommunications and technology at J.D. Power and Associates. “Generally, consumers have a much more positive attitude toward their photo printer if they believe they received a good deal, which creates a valuable marketing opportunity for retailers’ and manufacturers’ sales channels. By clearly communicating the value and cost-savings in bundling high-quality printers with cameras and their accessories, manufacturers can improve their chances of attracting customers while providing a more satisfying purchase experience.”
The study finds that 25 percent of customers purchase their photo printers through the Internet. Among those shoppers, 27 percent purchase from a retail Web site, 24 percent purchase directly through the brand manufacturer’s site and 9 percent purchase through an online auction site such as
eBay. Customers who purchase through the Internet have higher satisfaction levels with their printer (averaging index scores of 801 points on a 1,000-point scale) compared to owners who purchased in a retail store (averaging 779 points).
"Although it is not always the case, customers generally feel that they are able to find less expensive printers online than in a retail store, particularly at online auction sites," said Kirkeby. "This is further evidence of the critical role price plays in buying a photo printer."
The study also finds that there is a distinct relationship between overall satisfaction and brand loyalty. Among satisfied printer owners—those who provide an overall satisfaction score of 900 or more index points—52 percent will repurchase the same printer brand. Conversely, only 4 percent of indifferent or disappointed owners—those who provide a satisfaction score of 700 points or less—are likely to repurchase the same brand.
"Our research also shows that if customer satisfaction improves by 25 index points, repurchase intent among owners will, on average, improve by 10 percentage points, which can certainly prove beneficial to manufacturers," said Kirkeby.
Additionally, while nearly 70 percent of satisfied owners report they would recommend their printer brand to friends and family, only 5 percent of indifferent and disappointed owners indicate they would do the same.
The 2006 Photo Printer Customer Satisfaction Study is based on responses from 2,391 customers who purchased or received a photo printer between July 2005 and July 2006.
Labels: J.D. Power, printer
Thursday, February 08, 2007
Live Customer Service Scores Better Finds Power Study
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.
Labels: customer satisfaction, J.D. Power, wireless
