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NCSI: Customer Satisfaction Improves for Pay-TV, ISPs, Mobile Phones, Airlines

Subscription television and Internet service providers are the most improved for the first quarter of 2014, according to the latest results of the National Customer Satisfaction Index (NCSI-UK). Airlines, mobile phones, and landlines also make gains, driving the national level of customer satisfaction up 0.1% to 75.6 on a 0-100 scale. The only industries not improving customer satisfaction are mobile networks and energy utilities, with gas and electricity suppliers now the worst performing category tracked by the NCSI.

“Customer satisfaction with subscription TV and internet service providers is much higher in Britain than in the United States,” says Claes Fornell, Chairman and founder of the American Customer Satisfaction Index (ACSI). “In the US, pay TV is deteriorating and viewers are moving towards video streaming services, which do better in the ACSI. Virgin Media’s decision to offer Netflix as part of customer packages is a strategic move for both companies - one that hasn’t been possible this seamlessly anywhere else.”

Big Gains for Subscription TV as Virgin Leaps Ahead

Customer satisfaction with subscription television is up 4.4% to 71. Viewers are much more satisfied with the largest TV providers, Sky and Virgin Media, than they were a year ago.

Following Virgin Media’s introduction of a free 6 months of Netflix, the cable company’s NCSI score is up 9% to lead the category at 73. Sky also makes significant improvement, climbing 3% to 70.

Internet Service Providers no Longer Rock Bottom

Customer satisfaction with Internet service providers (ISPs) is up 3% to an NCSI score of 69, and in a small victory, ISPs are no longer the lowest-scoring category in the Index. According to users, service is somewhat faster and more reliable this year, but for ISPs, network bandwidth remains a challenge. An international comparison, however, reveals Britain’s ISPs are outperforming those in the United States (69 vs. 63), which have sunk to a record low on the American Customer Satisfaction Index.

Smaller ISPs lead with a combined NCSI score of 73, up 3% from a year ago. Among the largest ISPs, Virgin Media gains 4% to 71, overtaking Sky (unchanged at 69) for the lead. TalkTalk improves the most with a 6% increase to 67, and BT is the only ISP to decline, down 2% to the bottom of the industry rankings at 65.

Customer Satisfaction Static with Mobile Phone Networks

Customer satisfaction with mobile phone networks seems unaffected by the increasing stress on network capacity despite the rising popularity of smartphones and resulting demand for more data As data usage escalates, costs also rise. Under such circumstances, customer satisfaction often deteriorates. It is in that context that the results should be interpreted, and in that sense, it is not necessarily a bad sign that it is flat at a score of 74.

Tesco Mobile continues to lead the category, and as the virtual network operator rolls out free 4G service for customers, Tesco gains 2% to an NCSI score of 84. Tesco shares O2’s network, which takes second place with a 1% rise to 77. Virgin Mobile also edges up 1% to 75, just ahead of the industry average.

Three Mobile registers the biggest improvement. Since 2008, Three has been the lowest-scoring operator, but now jumps 6% to 73, ahead of EE (including Orange and T-Mobile) and Vodafone. Three and Tesco are so far the only providers to offer free 4G.

Mergers typically have a negative impact on customer satisfaction and scores for both Orange and T-Mobile have deteriorated since EE’s rebranding began in 2012. This year, Orange drops 4% to 70 and T-Mobile shrinks 1% to 71 as its online presence phases out. EE was the first to offer superfast mobile internet - but at a premium price. As 4G service is unavailable on T-Mobile and Orange brands, contract customers who want faster connection have no choice but to start a new plan with EE.

Smaller Mobile Phone Manufacturers Advance

Mobile phone handsets advance 1.3% to 79, one of the highest scores for any industry tracked by NCSI. The progress is due in part to a greater proportion of smartphone sales – a category for which customer satisfaction is quite strong.

Apple is leads the category for the second year in a row, up 1% to 82 following the release of the iPhone 5 S. In contrast, Apple is losing favour in the US, where Samsung has taken the lead in the recent American Customer Satisfaction Index (ACSI). In Britain, Samsung is unchanged at an NCSI score of 78.

Smaller mobile manufacturers and newer entrants are evolving at great speed. According to their customers, the devices made by smaller companies are now at least as good as those produced by many of the largest manufacturers. Overall, customer satisfaction for these other manufacturers is up 4% to 78, matching Samsung, Nokia (unchanged), and HTC (+7%). The dominance of the major players will probably be further challenged as Tesco – which already has the highest customer satisfaction for mobile network service – enters the smartphone market with its own phone brand later this year. Sony is the sole mobile maker to decline this year (down 5% to 75), and Blackberry remains at the bottom (unchanged at 70) with no improvement in customer satisfaction.

Sky Excels in Landline Telephone

Customer satisfaction with fixed-line telephone service is up 1.4% to 70 as nearly all companies improve. Sky leads among the largest providers with an NCSI score of 74, a 6% increase. But customers reserve their highest marks for smaller companies, up 1% to 78. TalkTalk gains the most with a 7% jump to 72, and Virgin Media is up 3% to 71. BT is the only one with weakened customer satisfaction compared to a year ago, sliding 1% to the bottom of the industry.

Smaller Energy Suppliers Post First NCSI Score, Breaking Customer Satisfaction Records

Household satisfaction with gas and electricity suppliers remains at 68, the lowest score in the NCSI. Nevertheless, some individual companies have improved, and smaller utilities are much above industry average. Though the Big Six still dominate the market, the number of customers switching suppliers is growing, and smaller companies post their first combined NCSI score of 77 - a record high for the industry.

The customer satisfaction results for the six largest energy suppliers are less impressive. SSE is at 72 (up 1%). EDF, which leapt ahead 6% a year ago, maintains its all-time high score of 71 for the second year. E.ON advances 6% to 70. Scottish Power (down 3%) and British Gas (up 1%) match the industry average of 68. Npower, which sunk 7% a year ago, now falls another 2% to 62.

British Airways Soars to Top

Passenger satisfaction with airlines improves for the sixth straight year, rising +2.9% to an all-time high of 72. Perennial leader Virgin Atlantic gains 3% to an NCSI score of 75, but a huge gain by British Airways (+6% to 75) brings Virgin’s advantage to an end. British Airways is effectively balancing service improvements with price, offering lower fares without compromising passenger service. Its effort to enhance the customer experience appears to be paying off. BA has gone from an all-time low as recently as 3 years ago to a record-high of 76 and is now tied for the top spot among airlines

The aggregate of smaller airlines inches up 1% to 74, surpassing the industry average, but Flybe and Easyjet lag by a significant margin. According to passengers, their low fares are not enough of a trade-off for low quality. Flybe is unchanged at 71, and Easyjet remains the lowest-scoring airline despite improving 3% to 70.

Visit www.ncsiuk.com for access to the free full report, including all customer satisfaction scores and customer experience benchmarks for each industry.

No advertising or other promotional use can be made of the data and information in this release without the express prior written consent of ACSI LLC.

About NCSI-UK

The National Customer Satisfaction Index (NCSI-UK) is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United Kingdom, and is produced by the American Customer Satisfaction Index (ACSI). Results are based on survey data from more than 10,000 customers collected via online panel during Q1 of 2014.

This methodology was developed at the University of Michigan and has been adopted worldwide as a leading macro- and micro-level indicator by universities, governments, and countries including the United States, the United Kingdom, Sweden, Singapore, Korea, Turkey, South Africa, Mexico, Colombia, Dominican Republic, Indonesia, and Barbados.

According to research from the University of Michigan, customer satisfaction – as measured by the NCSI-UK and ACSI – is directly linked to stock market performance. Companies with high scores on the ACSI and NCSI-UK produce higher stock returns than competitors and greatly outperform market indices.

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