(Please see previous post for the setup to this one)
In early February, TekSavvy released the results of five survey questions fielded by IDC Canada on its behalf, which probed for attitudes to Internet service among Canadians. In keeping with its White Knight role, the maverick ISP is not only going Ottawa one better on the research. TekSavvy also took the opportunity to launch a new tool to help customers navigate the decisions involved in choosing a particular access plan. They call it Find Your Plan and apparently people like it.
I spoke recently about this initiative to Tina Furlan, TekSavvy’s Director of Marketing and Communications, and the brains behind last year’s dramatic rebranding. The two main questions on my mind concerned a) why her team decided to plunge into the research game, and b) were they surprised by the results. Tina points out that TSI’s subscriber base across Canada (for all services) is now close to 270,000. Naturally, with that kind of growth, its traditional customer base of younger, techie males has broadened into a more mainstream and technically unsophisticated group, the very end-users who are especially puzzled and frustrated by all the bafflegab ISPs usually throw at them.
As to being surprised or not, Tina told me her folks saw many of their suspicions confirmed, not least because some of TekSavvy’s own customers find it challenging to make purchase decisions, like going for a 300-gig cap or unlimited service. So no, they weren’t especially surprised and neither was I, though some of the detailed findings will still make you shake your head.
Ignorance is not bliss when you want to join the online world
On February 5, TSI sent out a press notice about the research it had just sponsored – quite a departure even for this company. As you’ll see from the excerpt below, the study was aimed right at the issues discussed in my previous post, i.e. the alarming degree of ignorance and unhappiness that characterize Canadian onliners:
With many variables to consider when choosing an Internet plan – including pricing, packages, bandwidth, overages, gigabytes and speed – it is no wonder more than half of Canadians (57%) say they do not have a clear understanding of their Internet package, according to results of a TekSavvy survey released today.
As the saying goes, ignorance is bliss, but in this case, not having a clear understanding of an Internet plan can be downright expensive – resulting in consumers paying more than they should. It is no wonder that 67% of Canadians feel that the price of Internet packages are unfair [or] too expensive [my emphasis].
In order to make the research more affordable, TSI elected to put its own questions on an IDC Canada omnibus survey that covered other issues unconnected to Internet service. TSI’s email message notes the survey was conducted online (also reduces cost) and reached 1,500 respondents, 18 years of age or older, and was fielded during October 2013. It goes on to say that a “probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20” (I’m a little puzzled by the modal “would yield,” but I take this to mean that the 1,500 respondents constituted a representative sample).
TSI asked the following five questions:
- Do you know the details of your Internet package and what it gives you each month (e.g. bandwidth/connection speeds, download limits)?
- Do you know how much bandwidth you need on a monthly basis for your regular Internet activity?
- Have you ever been hit with extra charges for going over your monthly usage limit?
- Have you ever switched Internet Service Providers? If you have, what was the reason for the switch? (multi-response)
- What do you think about the pricing of internet packages, and how they are marketed to consumers?
Here’s what we learn from the survey responses (for the sake of clarity, I’ve taken some liberties with the wording of both questions and answers)…
Question #1 (details of your Internet package). More than half the respondents (~57%) said either a) I know the details, but not what they really mean; b) I don’t know the details, but I know it covers what I do each month; or c) I don’t know the details and I don’t know if it covers what I do each month. The takeaway TSI provided from that was: More than half of Canadians don’t have a clear understanding of their Internet package.
That seems like a good summation to me – but that figure has to be low. Broadband, or for that matter any complicated technology, creates problems in surveys about what respondents really understand. And unless you have time and details to work with, it’s very difficult to know whether a given respondent is being truthful or just saving face in feigning understanding. Since most people don’t want to look stupid even to a stranger on the phone who is collecting information anonymously, I usually assume responses like this under-represent the real extent of the problem of consumer knowledge.
Question #2 (how much bandwidth you need). I would have avoided the term “bandwidth” on the grounds it’s used in the industry in two different ways: here it’s assumed to mean the volume of monthly data throughput (measured in gigabytes). But in the fussier usage it means capacity, what most people call “speed” (measured in bits per second). I would have used an expression like “the amount of data you can download and upload in any given month.”
Not that this would have helped. In response to “how much bandwidth do you need a month,” three-quarters of respondents (over 75%) said either a) I have some idea, but I’m not really sure; b) Don’t have a clue; or c) I don’t know what bandwidth is. Only 11% chose the last option, explicitly about bandwidth, because – I’ll bet dollars to donuts – most of the 75% didn’t want to go near a term they don’t understand. On a longer survey, it would be useful to isolate jargon like “bandwidth” to get a read on public awareness. Be that as it may, TekSavvy’s general conclusion holds: “Seventy-five per cent of Canadians either aren’t sure or don’t know how much bandwidth they need to cover their monthly Internet activity.”
Question #3 (extra charges for going over cap). I’m not sure what to make of the result: almost 7 in 10 (69%) say no, they haven’t paid extra charges. Leaving aside the possibliity some may have paid without knowing it, I would like to know how many people have kept down their Internet usage precisely so as to avoid paying extra. That’s the appalling outcome of our ITMP framework: the use of economic measures – essentially price-gouging – to discourage Canadians from using the Internet. I would love to see Chairman Blais stand up some day and repudiate this terrible piece of social policy.
Question #4 (reasons for switching ISPs). The main finding here is that 60% of those who switched did so to get a better deal (as opposed e.g. to simply moving house). But that figure is incomplete unless you look at the prior issue, i.e. what proportion of respondents have ever switched for any reason. The answer is less than 2 in 5 (39.5%). I’m assuming this figure reflects all the things the incumbents do to make switching unappealing, like offering discounts for bundles and contracts. My assumption is based in part on many conversations with students and others who complain long and loud about how they get abused by Bell or Rogers, then when asked why they don’t switch, typically answer it’s too much trouble or they don’t “trust” the indies like TekSavvy.
Question #5 (how respondents characterize their ISP plans). We come full circle back to the brute fact that most people are unhappy with their ISP but not prepared to do anything about it. The survey found that a) nearly half of Canadians (47.9%) find Internet plans to be confusing; and b) 67% of respondents feel the prices of Internet packages are either unfair or too expensive. As a rough point of comparison, consumers surveyed last year as part of the American Customer Satisfaction Index (ASCI) gave the ISP industry the lowest rating of all industries surveyed in the US economy – an inaugural benchmark of 65 (see ASCI press release, May 2013, here).
Do the incumbents deliberately make information hard to find and understand?
There’s no doubt in my mind that the problems reflected in the TekSavvy survey are part of a deliberate strategy to mystify consumers. I can’t prove it, of course, and there is another possible explanation: incompetence. But motive doesn’t matter. If half or more of the Canadian online population is suffering in their business dealings with ISPs, isn’t it time the CRTC and Competition Bureau took an interest?
The theme of obscurantism also emerges from the PIAC study we looked at in my previous post. It offers a telling analysis of the difficulties the incumbents put in the way of understanding what exactly they’re selling you. Case in point: In their analysis of Bell’s use of the “up to” language in describing the speed offered on a particular tier, PIAC notes the following (p.17):
Overall, it was challenging and time-consuming to find information on Bell’s website about factors that affect the consumer’s ability to achieve the advertised maximum download and upload speeds. Even if the consumer were to find information on the factors, the information provided is general. Like Rogers, Bell does not provide information on average or typical download and upload speeds that consumers can expect to achieve from each package.
PIAC makes six recommendations as part of its 2013 study. As number 1 says in part:
ISPs should provide more complete and precise disclosure about various aspects of internet performance, such as download and upload speed and latency (responsiveness) and the reliability of these aspects. While absolute guarantees may be technically challenging for ISPs to provide, providing consumers with more forthcoming disclosure about what they can expect during peak and off-peak hours would greatly enhance consumers’ ability to make informed choices for internet services.
If you ever had any doubts about whether the incumbents are making an effort to communicate clearly, then consider the offer I got though the mail from Bell several weeks ago, one of the many unsolicited offers I get from Bell and Rogers on a regular basis (note to Post Master: their bumpf is unsolicited and my name is not “Resident”). The come-on is simple and compelling.
But the fine print, reproduced above (with a couple of editorial embellishments), runs over 400 words, the length of a decent blog post; and is so faint it’s almost impossible to scan (which I’m sure was entirely coincidental). In my humble legal opinion, this kind of marketing constitutes constructive deception (a concept I just made up, but we’ve got to start somewhere).
TekSavvy to the rescue
I mentioned earlier that TekSavvy used their research to launch an in-house solution to the problems experienced by ordinary folk in deciding on an Internet plan. The solution – dubbed Find Your Plan – is a short questionnaire customers can fill out on their own or with help from a customer rep. The page also features a glossary of five key technical terms: download, bandwidth usage, Internet speed, DSL and cable (it’s not how I would define them, which is why I don’t work in Customer Relations).
The questions themselves are very basic: do you have a cable line? a phone line? How much video does your household watch in a month? How much video does your household post online? How much online TV do you watch, like Netflix? And so on. What’s disarming about this questionnaire is… can it really be that easy to help people decide on their plan?
I asked Tina Furlan this morning how folks were reacting to Find Your Plan after a little over two weeks. The reaction has been positive, she says, adding:
“[Customers] are quite impressed with the fact that it’s a measure of the customer’s actual requirements and not our recommendations.”
Just think about that for a moment. We live in a country where broadband is comparatively lousy and definitely overpriced. And it’s taken this indie ISP to remind us Canadians deserve the broadband they need, not the broadband that’s going to help Bell and Rogers boost their ARPU this month. I don’t know what they’re adding to the drinking water in Chatham, but our friends in Gatineau should start looking into it.