Interactive Week - December 12, 1999
ISP Customers Tell It Like It Is
By Rebecca Wetzel
As the first decade of the commercial Internet fades into a nostalgic haze, it's time to examine how Internet services are living up to customers' expectations and bestow kudos on the Internet service providers that are stars in their customers' eyes. We asked readers to tell us what they look for in their business ISPs and let us know how satisfied they are with their service providers. Some ofhe results may surprise you.
And the winners are The most unexpected result of this survey is the identity of the newly crowned valedictorian of this year's class of ISPs: BellSouth.net. That winner, by a nose, is the first Bell company to vie for top billing in our field of 20 ranked providers. Although Bell South.net (www.bellsouth.net) ranks first in only one rating category, it places among the top five in almost every category, indicating a solid performance across the board. Other Bells do not fare as well, with Bell Atlantic Internet Solutions (www. bellatlantic.net) placing 15th, followed by Pacific Bell Internet Services (www.pacbell.net) at 17th and U S West (www.uswest.com) in 19th position, besting only Cable & Wireless (www.cwplc.com).
The remaining top finishers were not surprising to those in the know. UUnet Technologies (www.uunet.com), winner for the past two years, boasts a hard-fought second to Bell South.net this year. IBM Global Network (www.ibm.com/ globalnetwork) places third, Mind Spring Enterprises (www.mindspring.com) fourth and AT&T WorldNet (www.att.net) fifth. MCI World Com (www.wcom.com) was not lumped in with UUnet in the survey, because a number of MCI WorldCom customers had yet to be shunted to Cable & Wireless at the time the survey was completed. Answers from respondents identifying themselves as MCI World Com customers put MCI World Com in 10th position, 10 slots ahead of their soon-to-be service provider Cable & Wireless.
With Cable & Wireless trailing in customer satisfaction, it would not be surprising to see customers send their bits elsewhere as a result of the transfer. Some 37 percent of current Cable & Wireless customers describe themselves as somewhat or extremely likely to switch ISPs in the coming year. This compares with almost 15 percent of MCI WorldCom's customers and 19 percent for customer retention czar UUnet.
According to Hilary Mine of Probe Research (www.proberesearch. com), we can expect to see more Bell companies follow BellSouth. net's lead and doing a good job of satisfying their Internet customers over time. "As the Bells get serious about being ISPs, they will probably be good at it in terms of customer satisfaction," Mine says. "They understand the basics that people want reliability and solid service, customer care, etc."
As for why BellSouth.net ranks so highly this year, Mine says: "BellSouth.net took it very ser iously several years ago when >> >> they started having real competition for the first time, and they learned lessons from PacBell, Bell Atlantic and Ameritech, who got competition first. They also have very smart management, and as one of the earliest and biggest investors in wireless data networking, they got a lot of experience in very challenging data networking, in ways that other Bell companies have not."
Cindy Hamrin, vice president of marketing at BellSouth.net Business Internet Services, attributes BellSouth.net's top ranking to the importance the company places on listening to what customers want and delivering it to them. "We take seriously the relationship we have with our customers in our traditional services, and that extends into our Internet services. We try to listen to our customers and give them what they want. We listen, we focus on our brand, and we continuously emphasize the quality and reliability of our services," she says.
Connection type Many of this year's respondents, some 39 percent, have T1 (1.5-megabit-per-second) dedicated connections or fractional T1 links. Another large group, 31 percent, have dial-up connections, with the rest scattered relatively evenly among Integrated Services Digital Network (ISDN), Digital Subscriber Line (DSL), cable modem and T3 (450-Mbps) dedicated connections. A privileged minority, 1 percent, has OC-3 (155-Mbps) dedicated connections, and the remainder have 56-kilobit-per-second frame relay connections.
Important qualities when selecting an ISP Top contenders for most important attribute in choosing an ISP include uptime percentage reliability which ranks first, followed by network performance, then value for the price. Customer service responsiveness ranks fourth, network capacity and reach tie with bandwidth options for fifth place, followed closely by technical support. This top set of attributes reflects customers' desires to purchase high-quality service at a reasonable price.
Factors least important when choosing an ISP include billing, managed access, value-added services (such as e-mail, fax, applications hosting, remote access and so forth), Web hosting and service level agreements. Brand awareness lags farthest behind the pack in importance.
A sizable set of attributes falls into a middle group. This tier of attributes includes an ISP's reputation, managed security service offerings, breadth of services, ease of setup and start-up, and performance monitoring services and tools. Although these factors may contribute to choosing an ISP, they are unlikely to make or break the decision for most customers.
Depending on connection type, customers place different emphasis on the same factors. For example, although the percentage of uptime and network performance are important to all users, they are notably more important for respondents with broadband connections, including T1 through OC-3 leased line customers and the growing ranks of DSL and cable modem users. Value-added services such as e-mail, fax, application hosting, remote access and Web hosting, on the other hand, are more important to dial-up, 56-Kbps frame relay, DSL and cable users than to leased line customers. This is because leased line customers usually have staff and resources to serve their own needs for value-added services, whereas dial-up, DSL and cable customers are often on their own and need to outsource.
Percentage of uptime spells service reliability for customers, and reliability is the most critical requirement that customers demand of their ISP. Customers want the service to be up and running when they need it. ISPs that show poorly on this attribute should try harder if they want to remain in the fray.
IBM Global Network and BellSouth.net tie for first place on this attribute, with mean ratings of 4.24 on the 5-point satisfaction scale. In customers' eyes, IBM Global Network gets a slightly stronger pat on the back than BellSouth.net, as 86 percent of IBM Global Network customers surveyed described themselves as extremely or somewhat satisfied with the uptime, compared with 83 percent for BellSouth.net.
AT&T WorldNet garners second place with a mean rating of 4.23, followed by UUnet with a mean rating of 4.16. Road Runner (www.rr.com) takes third with 4.09, with Concentric Network (www.concentric.com) in hot pursuit with a mean score of 4.08. The Microsoft Network (www.msn.com) and Netcom (www.netcom.com) do not fare well, tying for last place with a mean uptime rating of 3.84.
Satisfaction levels vary somewhat based on service connection type. Leased line customers are more satisfied with the service reliability than customers with other types of connections. Frame >> >> relay customers are particularly unsatisfied with service reliability, compared to their leased line counterparts.
Network performance First the network must be up, then it must perform well, our respondents say. So how does the class fare on the performance metric?
UUnet outshines the rest in this attribute, with a mean satisfaction rating of 4.13 and an impressive 82 percent of surveyed UUnet customers describing themselves as extremely or somewhat satisfied with network performance. BellSouth.net also does well; placing second with a 4.02 mean rating, with Sprint (www.sprint. com) in third with a 3.97 rating. Fourth place goes to Road Runner at 3.93, and GTE Internetworking (www.bbn.com) and Mind Spring tie for fifth with a mean rating of 3.89.
On the other end of the scale, MSN again plays caboose, with a mean rating of 3.53. Only 60 percent of MSN customers surveyed characterize themselves as extremely or somewhat satisfied with network performance.
Looking at satisfaction based on connection type shows that leased line customers as a group are more satisfied with network performance than respondents with other connection types. As with reliability, frame relay customers are the least satisfied of the lot.
Value for the priceWith universal predictability, ISP customers, like customers in almost any other business, want to get the most value for their dollar. Looking at value for price, we find a number of players in a dead heat.
IBM Global Network and MindSpring tie for first place, boasting mean scores of 3.93, with Netcom trailing by a mere hundredth of a point at 3.92. BellSouth.net, once again among the top five, and @Home Network (www.home.net) are just behind, tying for fourth place at 3.91, followed by yet another tie this time for sixth place between EarthLink Network (www.earthlink.net) and Road Runner, with identical mean ratings of 3.82. When we look at the percentage of respondents who rate themselves either extremely or somewhat satisfied, however, EarthLink edges out Road Runner with 71 percent extremely or somewhat satisfied compared with 67 percent for Road Runner.
Dial-up customers are most satisfied with the value they receive for the price they pay for their service. Least satisfied are the customers who pay the most those parting with large sums for OC-3 service. Frame relay and ISDN customers are also noticeably less satisfied with price than their dial-up counterparts.
Customer service responsivenessAn ISP's service should always be up and humming like a top. But ISP customers know it isn't always so and when it isn't, they want action. Highest marks for good customer service responsiveness go to MindSpring, with a mean rating of 3.84, followed by UUnet with 3.83 and IBM Global Network at 3.79. In an interesting dichotomy, 74 percent of IBM Global Network customers profess to be extremely or somewhat satisfied with their customer service responsiveness higher than all of the others yet the mean rating is lower. Close examination of the data shows a preponderance of somewhat satisfied customers and a dearth of extremely satisfied customers, forcing the mean score down.
Fourth place goes to AT&T WorldNet with a 3.73 rating, and fifth goes to stalwart BellSouth.net at a mean rating of 3.7. In this category, MSN climbs out of last place to a more respectable 15th, while U S West takes the bottom spot.
T3 and frame relay customers are most satisfied with customer service responsiveness, whereas DSL and cable modem customers are least happy with their ISPs' customer service. As DSL and cable services are the newest and among the fastest growing on the list, it is hardly surprising that customer service is not fully up to snuff for this burgeoning group of customers.
Network capacity and reach UUnet tops the chart for customer satisfaction with network capacity and reach, with a mean satisfaction rating of 4.33. IBM Global Network is not far behind with a 4.31 mean rating, followed by MCI WorldCom with 4.15. Once again, BellSouth.net places well, this time fourth with 4.11. AT&T WorldNet is fifth with a mean satisfaction score of 4.09. MSN again places near the bottom, and Cable & Wireless brings up the rear.
Looking at satisfaction linked to connection type shows that OC-3 and other leased line customers are most satisfied with network capacity and reach, while dial-up customers are least satisfied on this metric.
Bandwidth options Road Runner has the highest satisfaction rating for bandwidth options, with a mean rating of 4.3, followed by UUnet at 4.27 and Sprint at 4.16. BellSouth.net occupies fourth position with 4.13 and MCI WorldCom comes in fifth at 4.09. EarthLink and MSN customers doled out mean ratings of 3.64 for their providers, allocating them to last place. Not surprisingly, T3 and OC-3 customers are most happy with bandwidth options, with dial-up users chafing at the bandwidth bit.
Technical support MindSpring receives the highest marks for technical support, with a mean rating of 4.04. IBM Global Network also does well to capture second place with 3.95. AT&T WorldNet comes in third with 3.91, followed by UUnet at 3.87, and Concentric and MCI WorldCom tie for the fifth spot at 3.80. Verio (www.verio.com) does not excel in its technical support rating, lagging considerably behind the pack with a mean rating of 3.22. Technical support is one of the few categories in which BellSouth.net failed to make it into the top five.
Customers with full T1 to OC-3 connections are most satisfied with the technical support services they receive. DSL, cable and ISDN customers are least satisfied with their technical support. Service providers as a whole have much work to do in this area.
Who's ready to switch ISPs and why Twenty-seven percent of the customers we surveyed indicate they are extremely likely or somewhat likely to switch service providers in the coming year. There is reason to believe that this number should be taken seriously, because 20 percent of those surveyed actually did change service providers during the previous 12 months. Most likely to switch are dial-up and ISDN customers, approximately 37 percent of whom are entertaining thoughts of switching, compared with 18 percent of full T1 customers.
Among the 20 ISPs included in our survey, there is considerable variation in customers' interest in switching. Starting with the ISPs whose customers are most loyal, at the top of the class is MCI WorldCom; only 15 percent of its customers indicate that they are extremely or somewhat likely to switch service providers in the coming year. If they are destined to become Cable & Wireless customers, they may have no choice in the matter. Road Runner followed, with 16 percent of customers contemplating a change. Sprint customers also indicated loyalty, with a little more than 17 percent seriously considering a change, followed by UUnet at 19 percent and IBM Global Network and AT&T WorldNet at 20 percent.
Most likely to switch are Netcom customers, 48 percent of whom are contemplating a change. EarthLink and Verio follow Netcom at almost 46 percent, with Cable & Wireless at slightly more than 37 percent and MSN at 33 percent. It is interesting to note that although Cable & Wireless ranked last in customer satisfaction, its customers indicated a lower penchant to change than EarthLink and Netcom customers, who bestowed higher satisfaction scores on their ISPs. This difference is probably linked to the type of customer base each provider has. EarthLink and Netcom are dial-up ISPs, and it is much easier for a dial-up customer to switch service providers than it is for a leased line customer.
If the pool of MCI WorldCom users we surveyed contains a large number of customers to be handed off to Cable & Wireless, we predict an increase in the 15 percent who are currently contemplating switching. This prediction is based on the fact that Cable & Wireless customers' 37 percent likelihood of switching is more than twice that of MCI WorldCom in the survey.
The reasons that customers switched ISPs during the past year ran the gamut, but by far the most frequent reason for switching was bandwidth limitations. Of the 736 customers who switched last year, 349 of them 47 percent cited limited bandwidth as a reason for switching. Consistent with the desire for a faster and better network experience, slow connections and busy signals constituted the second most popular reason for making a change. Of the 736 customers who switched, 288 39 percent complained of slow connections and/or busy signals. Price is also a common reason given for switching, followed closely by the availability and quality of technical support.
Not surprisingly, high-speed leased line customers are considerably more loyal than their dial-up counterparts. An impressive 64 percent of OC-3 customers and 57 percent of T3 customers have been with their current ISP for more than three years, compared with 35 percent of dial-up customers. Most of the high-speed leased line connection respondents' organizations have been connected to the Internet for four and a half years or more, compared with three and a half for most dial-up customers. In other words: Once in the fold, high-end leased line customers are unlikely to stray.
Also of note This year's survey results reveal several other interesting tidbits from reader responses. Based on the data, the biggest corporate fish are served by MCI WorldCom, with a mean company size of more than 3,000 employees. In fact, 46 percent of the MCI WorldCom corporate customers surveyed have more than 5,000 employees.
GTE Internetworking, IBM Global Network, Sprint and UUnet respondents have a mean company size in the 2,000-employee range. AT&T WorldNet, Bell Atlantic Internet Solutions, Cable & Wireless and U S West cluster in the 1,500 employee range, with BellSouth.net, MSN and PSINet (www.psi.net) hovering around the 1,000 employee mark. BellSouth.net and MSN have a sharp bifurcation in the customer bases, with about half of their customers employing fewer than 25 people and just over 15 percent with more than 5,000 employees.
Companies using Concentric, EarthLink, MindSpring, Pacific Bell Internet Services and Verio have an average of 400 to 700 employees, with roughly 50 percent of their customers employing fewer than 40 people. Predictably, @Home and Road Runner serve the small fry, with mean employee counts of around 150. More than 70 percent of the @Home and Road Runner customers surveyed have fewer than 25 employees.
Rebecca Wetzel is an industry analyst, consultant and writer. She can be reached at firstname.lastname@example.org