Comcast Investors Need To Care About Customer Service

In the BusinessWeek blog called Management IQ, Jena McGregor put up the following post yesterday: Comcast’s Customer Service Woes: Do Investors Care? It discussed a story in the Wall Street Journal about Chieftain Capital Management’s Glenn Greenberg, who is calling for Comcast CEO Brian Roberts. In her blog, Jena makes the following comment:

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.

My take: Great insight Jena; and my answer is a loud and resounding “YES!“ There’s no question that Comcast’s issues are at least in part brought on by how it treats its customers. In Forrester’s Customer Experience Index, which ranked how consumers felt about 112 large US firms, Comcast’s ISP business was rated 95th and its TV business was rated 101st. While those industries did not fair well in the eyes of consumers, Comcast was still rated relatively low compared to its competitors. Comcast came in 9th out of 10 ISPs (only beating out Charter Communications) and 6th out of 8 TV service providers (only beating out Cablevision and Charter Communications).

The bottom line: Investors should ABSOLUTELY care about how a company treats its customers. It doesn’t take a lot of fancy valuation algorithms to figure out that happy customers are more valuable than unhappy ones.