Dish Network renews customer service focus
Joyzelle Davis, Rocky Mountain News
Published November 24, 2006 at midnight
Dish Network became the nation's third-biggest pay-TV provider by positioning itself as a consumer- friendly alternative to the cumbersome bureaucracies of cable companies.
But as the company's leader recently pointed out, Dish is in danger of losing its edge.
"We're not rated No. 1 in every poll like we used to be," Charlie Ergen, chief executive of Douglas County- based Dish parent EchoStar Communications, said in a conference call with analysts this month.
Ergen was referring to two closely watched annual customer surveys: the University of Michigan's American Customer Satisfaction Index and the J.D. Power and Associates residential cable/satellite satisfaction study.
For the first time in three years, Dish slid to second place in the -ACSI survey. In the J.D. Power study, Dish placed behind a cable provider or behind satellite-TV rival DirecTV in every region of the country.
Responsive customer service has always been a priority for Dish, which launched its satellite-TV network in 1996 and now has 12.8 million customers. Both Dish and larger rival DirecTV took off in the mid-1990s after positioning themselves as innovative alternatives to moribund cable companies. But after years of losing subscribers, cable providers have responded by investing billions to upgrade their networks.
Cable's digital programming tiers now offer the same breadth of channels and clear pictures as satellite, as well as technologies such as video on demand, phone service and high- speed Internet that satellite can't match.
Ergen "has to have something to differentiate Dish in the market, and that's service, service, service," said Steve Kirkeby, director of telecommunications and technology research at J.D. Power.
EchoStar officials declined to comment for this article. The company's actions, however, indicate that it's working to close the customer service gap.
In the past few months, EchoStar opened a 600-person call center, the company's 11th, in Texas and rolled out an automated speech-recognition phone system to answer calls faster. The company also created the position of executive vice president in charge of Dish's national installation and service network. It moved Chief Financial Officer David Rayner to the post in September.
Those efforts sliced into EchoStar's third-quarter profit, which fell 33 percent to $140 million. The quarter also was dragged down by tough comparisons with last year, when EchoStar benefited from a $73 million tax gain.
Dish's rivals haven't been sitting still. Next year, DirecTV will open a 1,000-employee call center in Denver. And cable rivals have put millions into hiring and training new customer service agents.
"Cable companies have invested quite a lot of money in getting better and better," said Jimmy Schaeffler, chairman of research firm the Carmel Group. "Hollywood today couldn't make a movie called The Cable Guy because it wouldn't have the same meaning any more."
Keeping subscribers isn't the only reason for EchoStar's refocused attention on customer service. Ergen's comments on the analyst call came in response to a question about whether the company has considered offering Internet-based phone service as a bundle with its video service.
Ergen replied that while EchoStar isn't interested in offering a phone service just now, there may be "other things that we certainly can sell them" in the future.
But in order to do that, he said, "you better be really good at your customer service to begin with."
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