Customer Service Hall of Shame

July 23, 2015 by Sam Stebbins

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 Every company in the United States claims to care more about its customers than the competition does. Yet polls show that some corporations do a truly abysmal job of keeping their patrons happy.

24/7 Wall St. collaborated with research survey group Zogby Analytics, which polled more than 1,500 adults about the quality of customer service at 151 of America’s best-known companies in 15 industries, asking if the service is excellent, good, fair, or poor. (See how the survey was done and full results on the last page of this article.)

Those with the highest share of poor rankings make up the Customer Service Hall of Shame; those with the highest share of excellent ratings make up the Customer Service Hall of Fame. For the second straight year, cable service provider Comcast topped the Hall of Shame as the company with the worst customer service.

Click here to see the Customer Service Hall of Shame

Click here to see the Customer Service Hall of Fame

Most of companies in the 2015 Hall of Shame have appeared on the list before. Seven companies made the list for at least the third time since 2009. Comcast and Bank of America have had bottom-ranked customer service for seven consecutive years.
Other companies made the Hall of Shame for the first time this year. Both Verizon and T-Mobile made their debut this year, joining AT&T as the three mobile telephone companies with the lowest rated customer service.

Cable, satellite, and wireless service providers make up six of the 10 spots on this list. These industries are notorious for their long-running problems with customer satisfaction, and there are many potential reasons for this trend. One likely explanation may be the limited competition these companies face.

In an interview with 24/7 Wall St., customer service and experience expert Shep Hyken explained that cable companies in particular may suffer from a lack of urgency to improve the quality of their customer interactions.

Because of this, these companies have earned a reputation for terrible customer experiences unique to the industry. “When you want to have cable installed, you have to take a half a day off of work, and you have to hope the cable guy shows up,” Hyken said. He noted that if Apple, or one of the companies that make up this year’s Customer Service Hall of Fame were in the cable business, customer service would improve. Hyken added that many cable companies have worked to reduce the customer service problem in particular, but bad service practices are common enough that the stigma is still there.

Customer dissatisfaction among these service providers may be about to get even worse. Four of the companies on this year’s list are either in talks or are actively in the process of merging, which could conceivably exacerbate the problems caused by lack of competition. Verizon has bought AOL, and DirecTV and AT&T also have a pending merger. If this year’s survey is any indication, customers of these companies will likely not see much of an improvement in their experience.

Another industry that tends to perform very poorly in this poll is the banking and financial services sector. Bank of America and Wells Fargo both made the Hall of Shame this year, while JP Morgan Chase just missed the list. Residual acrimony from the financial crisis may partly explain these companies’ poor rank, as many Americans blame the financial companies’ excesses and carelessness for the crisis.

Hyken, on the other hand, argued that these poor scores may have more to do with government regulation imposed on the banks. “There are a lot of rules and compliance the banks have to exhibit in order to stay in business, and unfortunately, those aren’t always customer-friendly rules.” Hyken added that banks could go through the process of explaining why regulations force them to interact with clients in certain ways, but he noted it would be very difficult.

This is 24/7 Wall St.’s Customer Service Hall of Shame.

10. Wal-Mart
>Pct. ratings “poor”:
13.8%

Wal-Mart has been a divisive corporation for decades. It has been the subject of books and documentaries that mostly critiqued the company’s pay and general treatment of workers, as well as its devastating impact on community mom and pop businesses. The other side of the debate claims Wal-Mart is a boon to small towns that do not otherwise have access to cheap consumer goods and produce. The company also hires the elderly and persons with special needs.

While customer satisfaction is not the same as approving of a company’s business practices, it may be that respondents let their views on Wal-Mart’s ethical practices affect their customer satisfaction rating. Of those surveyed, 41.9% had an overall negative experience, while 13.8% rated their experience with the company as poor, the lowest possible rating, both very high figures. Still, plenty of people enjoyed their Wal-Mart shopping experience, and nearly one-quarter of respondents rated the company as excellent.

Companies with especially poor customer service ratings are often among the nation’s largest — with a greater number of transactions, more dissatisfied customers often accumulate. To discuss our findings, 24/7 Wall St. spoke to Praveen Kopalle, Professor of Marketing at the Tuck School of Business at Dartmouth. According to Kopalle, Wal-Mart has plenty of resources to dedicate to improving its customer service. Long lines, relatively poor variety, and higher-than-expected prices could explain the low satisfaction, he said.

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9. Wells Fargo
>Pct. ratings “poor”:
14.0% (credit card, banking)

Many Americans held the banking industry responsible for the recent financial crisis, and Wells Fargo’s reputation may still be suffering as a result. Survey respondents rated Wells Fargo’s banking and credit card divisions equally: 14% of people reported a poor experience with each division. However, 32.2% of people had an excellent experience, relatively high compared with other poorly-rated companies.

Bad publicity may be only part of the problem. Government regulations and large fines imposed since the recession may have lowered the quality of service at many Wells Fargo branches. Despite consistently ranking among the worst companies for customer service, Wells Fargo, like other large banks, is doing well financially. Net income increased substantially in each of the company’s last three fiscal year. In fiscal 2014, Wells Fargo reported net income of $23.1 billion.

ALSO READ: Companies With the Worst Reputations

8. T-Mobile
>Pct. ratings “poor”:
14.7%

Wireless service provider T-Mobile’s customer service reputation took a serious hit this year, causing it to make the Hall of Shame for the first time. This year, 14.7% of respondents rated the company’s service as poor. While roughly 63% of respondents rated the company’s service positively last year, the rate dropped to 58.3% this year.

The company appears to have overtaken Sprint as the third-largest wireless carrier in the country, and while it might make up for being a runner-up to frontrunners AT&T and Verizon with exceptional customer service, it also struggles in that department, as well as in other metrics. In the most recent report by Rootmetrics, the gold standard measure of network services, T-mobile ranked dead last for reliability by a considerable margin.

7. Verizon Communications
>Pct. ratings “poor”:
15.0%

According to Rootmetrics, Verizon outranked all major competitors in five out of six measures, including size of network and overall performance. Rootmetrics noted that all cellular networks, Verizon included, are improving year by year.

Though Verizon may be steadily improving the speed and reliability of its network, the company’s customer service reputation is suffering. The percentage of customers who rated their experience as poor jumped to 15% in 2015, putting the telecom giant at No. 7 on this year’s Hall of Shame worst customer service companies.

In addition to lagging customer service, the company’s leadership also ranked poorly. Based on Verizon employee reviews, Verizon CEO Lowell McAdam received a 64% approval rating on Glassdoor.com, the lowest of any CEO of the major cellular service providers. Though there is no direct relationship between CEO approval and customer satisfaction, a lack of confidence in senior leadership is often a sign of employee dissatisfaction, which can then translate to poor customer service.

The cellular service industry is generally notorious for poor customer service. Only three other industries received a larger share of poor reviews in 2015. Though Verizon may be working hard to improve its product, this has not translated yet to a positive customer experience.

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6. AOL
>Pct. ratings “poor”:
16.1%

AOL has been on the Hall of Shame nearly every year since 24/7 Wall St. began covering this survey. It was ranked either the worst or second worst every year in the first four years but has improved somewhat since. Still, the media company took a step backward in 2015, moving from eighth to sixth place on the list. While other companies on the Hall of Shame tend to share the list with several other companies in their industry, such as banks and cable service providers, AOL is the only primarily web-based company to make the list.

Since it spun off from its failed merger with Time Warner, AOL has carefully established itself as a major content provider. AOL shares soared earlier this year after it was announced that Verizon would acquire it for $4.4 billion. Whether the new company will set a higher standard for customer satisfaction is unclear as the parent-company-to-be, Verizon, is ranked slightly worse AOL on this year’s Customer Service Hall of Shame.

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5. AT&T
>Pct. ratings “poor”:
18.8% (mobile) 17.1% (U-verse)

Making the list for the third consecutive year, AT&T is yet another cellular service provider with waning customer satisfaction. Nearly 19% of customers surveyed rated their experience with the company as poor, a slight jump from last year’s figure of 17.5%. This is bad news for the over 120 million consumers who choose AT&T.

The company’s business practices have recently caught the attention of federal authorities. The Federal Communications Commission reported last month its intention to fine the telecom giant $100 million for misleading subscribers of its so called “unlimited data” plan. According to a an FCC press release, AT&T significantly reduced data speeds for those customers. FCC Chairman Tom Wheeler said the Commission was taking action because consumers were “deceived by misleading marketing materials and insufficient disclosure.”

Along with deceitful sales practices, AT&T does not appear to provide the same level of coverage as other cellular service providers. According to testing by Rootmetrics, AT&T fell behind Verizon, its chief competitor, in five out of six measures of network speed and reliability. An inferior product is bound to have a negative impact on overall customer experience.

4. Dish Network
>Pct. ratings “poor”:
21.3%

Since 2010, Dish Network only missed making the Hall of Shame once, in 2011. The company fared particularly poorly this year. As many as 46.1% of respondents had a negative experience with Dish’s customer service, the fourth worst of any company considered.

Nearly across the board, cable and satellite service providers received abysmal ratings for their customer satisfaction, and Dish network is no different. Perhaps one reason for the company’s poor customer service is employee dissatisfaction. According to Glassdoor.com, current and former Dish employees rated the company 2.6 out of 5, one of the worst ratings of any major company.

Dish has reportedly been considering a merger with T-Mobile. Given that the wireless service provider is also a regular on the Customer Service Hall of Shame, it seems dubious that Dish will make it off this list any time soon.

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3. Bank of America
>Pct. ratings “poor”:
21.4% (credit card, banking)

Bank of America has paid in more ways than one for its role in the financial crisis. And while the economy has largely recovered, the same likely cannot be said for Bank of America’s reputation. Ranked third on the Hall of Shame list, 21.4% of survey respondents rated their experience with the company as poor.

In the same survey, 38.9% of respondents, the largest share by a wide margin, said that fees were their biggest problem with the bank, either because the fees were too high, or occurred to frequently. Bank of America is no different. The bank’s website lists five fees for checking accounts and another five for savings accounts. Thirteen other service fees include a $2.50 charge for using another bank’s ATM and a $35 overdraft penalty.

Disapproval of the bank’s customer service dropped nearly 3.5 percentage points from last year. Additionally, 2015 is the first year in the last five that Bank of America has not topped off the Hall of Shame list.

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2. DirectTV
>Pct. ratings “poor”:
21.5%

No stranger to the Hall of Shame list, DirectTV’s reputation took a further hit in 2015. With 21.5% of respondents reporting a poor experience with the company, dissatisfaction has grown by more than a full percentage point from the previous year.

Nearly 44% of survey respondents cited high rates as a reason for their disapproval of cable TV providers. Critics argue that cable companies can get away with charging high rates due to a lack of competition. Without alternative companies to choose from, consumers are forced to pay more for premium channels and service that does not improve year to year.

As if the company did not already have a reputation problem, AT&T is poised to acquire the cable TV provider for $48.5 billion this year. The deal would effectively combine two of the five companies with the lowest customer satisfaction.

1. Comcast
>Pct. ratings “poor”:
28.3%

Comcast had the worst customer service reviews of any company this year by a wide margin. At 28.3%, more respondents ranked their experience with the company as poor than any other company. Furthermore, 54.4% of those surveyed claimed that their overall customer experience was negative, nearly 10 percentage points higher than the next worst rated company. This is Comcast’s seventh consecutive year on the Hall of Shame, and its first year at the top.

Lack of regional competition for many cable TV providers is likely a primary reason for their low customer service ratings across the industry. Without alternatives to choose from, customers are forced to pay high rates for service that does not improve. This problem was nearly exacerbated earlier this year when Comcast attempted to merge with the nation’s next biggest cable TV provider, Time Warner Cable. However, the Justice Department and the Federal Communications Commission effectively killed the merger on antitrust concerns.

In the face of its poor customer service reputation, Comcast may be attempting to turn things around. Catering to consumer trends, Comcast announced earlier this month the launch of its own cable streaming service called Stream. Stream will compete with companies such as Netflix and Hulu and allow Comcast customers to stream television shows on their TVs and mobile devices.

Click here to see the Customer Service Hall of Fame

Methodology:

24/7 Wall St. commissioned Zogby Analytics to conduct an online national survey in which more than 1,500 randomly chosen respondents rated customer service at 151 of the best-known companies in the country. Fifteen industries are represented in the study.

Respondents were asked to evaluate customer service quality as “excellent,” “good,” “fair,” or “poor.” Of the 150 companies, 108 companies had at least 500 valid responses. Companies with fewer valid responses were not considered.

When a company with multiple divisions scored as one of the best or worst for customer satisfaction, the company was only listed once in our rank.

The 10 companies with the highest percentage of “poor” responses represent our Customer Service Hall of Shame. Using the same methodology, the 10 with the highest percentage of “excellent” responses became our Customer Service Hall of Fame. This is the second year 24/7 Wall St. has conducted this study.