Why Australian ISPs are losing customers (and they probably don’t know it yet)

Being an ISP is hard. Consumers now view the Internet like air — we take it for granted when we breathe it, when we can’t breathe in enough we hyper-ventilate, and when it doesn’t work we feel like we are drowning. Rarely does one say, “Great job Mr. ISP!” when the Internet is working, but we always have very choice words for it when it is not.

As ProductReview tracks 73 ISPs in Australia and we have over 12,000 reviews of their service which are used by close to 50,000 Australian consumers every month (click here for a full list of brands covered and their scores), we have a detailed view of the local ISP industry. Based on the results we have collected, Australian ISPs by and large are not doing themselves any favour with their customer service. The average score in our ISP category was a dismal 1.9 out of 5 stars and only 5 brands, out of the 51 that had more than 20 reviews, scored over 4 stars.

This is not a unique Australian phenomenon. Forrester Research conducts an annual Customer Experience Index survey in the US and ISPs are traditionally in the bottom four industries every year (together with health insurance, TV service providers, and mobile phone services). It’s easy for ISPs to fall into the trap that because it is a tough industry and many others have poor scores, it is okay to not be viewed positively by customers. In many ways, it’s the “hey, well at least I am not as bad as that guy…” perspective.

However, there are a small number of ISPs in Australia that are bucking this trend and are receiving great feedback from their customers. Firms like Boom Broadband,Tangerine Telecom, MATE Communicate, Australia On Line, SkyMesh, and Lizzy all garnered solid scores (3.7 stars or higher) and relatively consistent reviews from their customers. As we look at the trend of consumers researching their next ISP onProductReview, we increasingly see traffic moving to these brands based on their performance and their rankings.

At the opposite end, we see some household names really struggling; Dodo (1.52 stars),Optus (1.59 stars), TPG (1.65 stars), Telstra (1.66 stars), and iiNet (1.7 stars) are some examples. These companies are still heavily viewed on ProductReview, but as more consumers research their next ISP online using social media or sites likeProductReview, the large incumbents will struggle to show how they can provide a better customer experience than their more nimble competitors who can show tangible proof through reviews. As delivering an Internet connection becomes ever commoditised, the customer experience will be the main competitive differentiator for providers.

Many ISPs do not realise how their online reputation is costing them customers as they either do not yet see it or are failing to address the issue. This trend will only increase as we are now into “the Age of the Customer” and consumers will leverage online insight, peer recommendations, as well as the overall perceived customer experience to make a purchase decision. An overused example I know, but this is truly a David and Goliath situation. Ready access to information like reviews is the sling and customer experience is the rock; and we all know how that story ended.