Telecom Consumers Say Forget the Bells and Whistles

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BOONTON, NJ. October 15, 1998:

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Residential telecom customers don't consider fancy features or one bill for all services top priorities when choosing a telephone company, says a new Consumer Telecom Report by Insight Research. Of 1,018 consumers surveyed in a nationally representative sample, well more than half ranked advanced features and one bill as the least important criteria for selecting a carrier. Lowest price and superior customer service were far and away the most important deciding factors.

According to Insight's report Consumers' Reactions to Telecom Competition, telephone companies may find that offering advanced features and one bill has little effect on consumer sales because residential customers assume all telephone companies already offer these features. In Insight's survey, "lowest price" was ranked the primary selection criterion by 39.9 percent of respondents; "customer service" was selected number one by 37.8 percent. "Advanced features" was only chosen by 3.4 percent as the leading differentiator, and "one bill" was touted by 7.9 percent. Even "trusted company name" seems to be a lackluster quality, with just 6.2 percent of the consumers surveyed claiming it as their principal decision factor. Interestingly, these criteria rankings remained consistent across demographic lines--gender, age, metro status, employment, marital status, and household size.

"What does this mean for the carriers? An even more aggressive price war that may further alienate customers," warned Robert Rosenberg, president of Insight. "We performed our own win-back experiment and found that carriers often made confusing, contradictory offers. And despite major advertising campaigns, 10 percent of the population still doesn't know who their long distance carrier really is," Rosenberg said.

Further consumer demographics and forecasts of telecommunications service revenue are published in Consumers' Reactions to Telecom Competition, a 102-page market research study. Primary research consisted of interviews with regulators, industry players, academicians, as well as Insight's proprietary survey of 1,018 consumers. For this sample, the survey data was weighed to account for probabilities of random selection and balanced by age, gender, race, and education to match U.S. Census demographic variables.  An excerpt is online at www.insight-corp.com/consumer.asp.

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Donna Savino

at Insight Research

973-541-9600