Comcast's Customer Service Woes: Do Investors Care?

Posted by: Jena McGregor on January 22, 2008

The story in today’s Wall Street Journal about Chieftain Capital Management’s Glenn Greenberg, who is calling for Comcast CEO Brian Roberts to step down, was an interesting profile of this lesser-known investor. Greenberg’s dad is the famous baseball player Hank Greenberg—not the former AIG CEO—and his mother was an heiress to the Gimbel Brothers department store fortune. Greenberg, a former squash champion, apparently lost his shot to work in the family business after dissecting the company while a student at Columbia Business School. Greenberg cites weak management as one of the primary reasons for Comcast’s struggles—he even polled other large shareholders, 23 of whom cited problems with management, too—and the “arrogance” of the disclosure that Comcast would pay the estate of Roberts’ father, Ralph Roberts, his annual salary (currently $1.85 million) for five years after his death.

But what the article doesn’t address is whether Comcast’s issues may be brought on, at least in part, by its customers’ widely aired complaints about its customer service. In December, Comcast, whose stock is down some 40% over the last year, said it expects its “revenue generating units” (that’s subscribers, folks, like you and me) to slow, growing by approximately 6 million for 2007, compared to its previous guidance of 6.5 million. As competition increases from phone companies and satellite providers, more and more consumers can choose to turn to the companies that treat them well. One need look no further than blogs like this or this find evidence that Comcast is the frequent target of unbridled consumer ire. Which makes me wonder: When will investors focus on customer service as an issue they should address?

(Side note: Join our forum on the best & worst customer service experiences you’ve had here. We’re looking for stories for an upcoming package and would love to hear your story!)

Reader Comments

Deirdré Straughan

January 22, 2008 12:45 PM

A company possibly hated even more than Comcast is Italy's Telecom Italia - read and weep at the experiences of one poor customer (me): http://www.beginningwithi.com/italy/living/telecom.html - but also see the comments on http://www.beginningwithi.com/comments/2006/08/30/share-your-experiences-with-telecom-italia/
- the level of vitriol is astonishing.

As you'll see in my long story, Telecom Italia at least appears to care what investors might think, but that doesn't really change their behavior.

Unfortunately, Telecom is in many ways still a monopoly, so we can't take our business elsewhere in the droves that would be required to get investor attention. Telecom knows they don't need to spend much to keep us happy - we're stuck with them anyhow - so in fact they are following perfect corporate economic logic. Isn't this also true of Comcast in some areas of the US?

Bruce Temkin

January 22, 2008 1:39 PM

I recently published a report which ranked the customer experience of 112 large US firms based on a survey of nearly 5,000 consumers. Comcast's TV business came out #101 and its Internet business was ranked #95. There's clearly an issue with how the company interacts with customers.

You can see more information about this ranking on my blog "Customer Experience Matters" at http://experiencematters.wordpress.com/

Shell Smith

June 3, 2008 4:57 PM

All economic classes I have ever taken says that it costs more to get a new customer, then to keep the ones you have. If Comcast's investors don't care about the customer service (or lack there of) that is going on, then they should sell now - because more customers are just going to leave, and profits are going to fall. I recently came across an interesting http://www.businessweek.com/careers/managementiq/archives/customer_service/index.html that talked about the customer service downfall in today's market. The president of a customer service company called Mindshare, made some interesting points about what companies need to be doing today.

Eddie Stewart

June 5, 2008 12:37 AM

I took a cool survey that tests your customer service IQ online. I got a D+ but that's better than most people get.

Vin Subrajmanan

June 30, 2008 4:50 PM

Honestly, customer service in any consumer based industry is a major factor in the performance of the company, and therefore should stand as an indicator for smart investors. For those like me who are looking for new ideas on customer service for our small businesses, and even for big businesses looking to get back in touch with their clients, I'd look at this site I've found called Mindshare. MindShare a company that will work with you to look at your customer service performance and goals.

Jon

September 14, 2008 6:47 AM

The subject of whether Comcast's shareholders needs to demand significant improvements in customer service and infrastructure investments was also raised here: http://radoff.com/blog/2008/09/13/comcast-doesnt-really-care/

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