Cox Communications loves Customer Care

Today’s discussion is something that I’ve been thinking for a while but never really found a company that sets the example. But lucky for us, the consumers, that might be changing. U.S Consumers generate about $60 billion of yearly revenue just on voice plans. In fact, cable companies have been laying miles of new fiber-optic cable and doing everything they can to steal chunks of that business from the phone giants. However, they haven’t been very successful yet, pulling away just about $5Billion in phone revenues.

There seems to be one exception, Cox Communications. They found a formula that works, which is beating phone companies on customer service. On a variety of metrics, from network performance and reliability to billing and cost, customers in several regions describe Cox as their preferred provider. That is a big surprise given the poor reputation that many cable providers have among their own customers. But developing crossover appeal will become increasingly important as the broadband lines blur. Cable companies are offering new phone plans; AT&T and Verizon are launching TV and other advanced video services. Further, Cox, Comcast, Time Warner, and Advanced Newhouse Communications are beginning to sell a wireless phone service, Pivot, in select markets.

Let’s keep in mind that phone is the fastest-growing portion of most cable company’s business. For instance, Cox is generating about $1 billion a year from its 2.1 million phone customers, with profit margins of about 50%-60%, with nearly 20% of the homes in neighborhoods where it offers phone service signed up, according to researcher IDC. Conversely, less than 7% of customers in cable giant Comcast's neighborhoods take its phone service. (Cablevision Systems Corp. has the industry's best phone-penetration rate, 29%). On the other hand, phone companies capture 5% or less of their potential TV customers.

But let’s get back to customer service. First, Cox uses one customer-care provider, with U.S.-based centers. Second, rather than pushing agents to hurry customers off the phone and causing multiple call-backs, Cox strives to handle issues in a single call and grades representatives on how well they eliminate problems. Third, to avoid confusion, field technicians tap into the same system used by call-center reps. However, performing at the same high level in wireless could be challenging as they will use Sprint Nextel Corp.'s cellular network, which has been overwhelmed with problems after Sprint's troubled integration with Nextel. Also, cell-phone service is one area where consumers seem less eager to switch. So, it will be Cox’s job to convince customers that cable companies can provide wireless service and customer service at the same time.