Broadband customers buy on price, switch on speed

Survey shows loyalty to suppliers is precarious

The main reason why consumers switch broadband supplier is because of disappointment with connectivity speed, but when they choose a new provider, they do so based on price, a recent survey has found.

The report, What are the causes of customer dissatisfaction in the UK ISP market, and what drives dissatisfied customers to switch providers? by call centre and customer service specialist Orchid Consulting reveals that over half of broadband customers have switched suppliers at some point.

As would be expected in the commoditised domestic broadband market, purchase decisions are made on price. But switching decisions are driven by connection speeds and customer service levels, so consumers are likely to repeat the mistake of buying the cheapest – not necessarily the best value – provision.

“What’s interesting is that price is the biggest single driver of purchasing decisions, not reliability of service. It would be more logical that if people want to switch that they should choose their new provider on the same basis that they decided to leave the old one. Otherwise it’s not comparing apples with apples,” said Keith Gait, founder and principal consultant at Orchid Consulting.

The research shows that customers expect the service to be reliable above all else, with connection speed the next most important attribute.

Over a quarter of customers say the customer service they receive does not match their expectations. They choose their provider because of price, then brand and then speed.

The most common causes of dissatisfaction were speed, price, customer service then reliability of service. The key point at which dissatisfied customers switch was found to be speed of connectivity.

A surprisingly high number of respondents – 81 per cent – claim to be satisfied with their current supplier. Previous studies have put the figure closer to 50 per cent or below. Nevertheless, this does not translate into loyalty, Orchid's study found.

Nor is past behaviour any indicator of future loyalty: 80 per cent of respondents had been with their current supplier for more than a year, but were no less prone to switching than those with much shorter tenure, the survey showed.

“Satisfaction or a continuing subscription is not an indicator or predictor of loyalty and should not be relied upon as a predictor of low churn behaviour,” said Gait. “The key learning is that you cannot focus simply on one aspect of your offering. Purchasing decisions and switching decisions are much more complex than any one single issue.”