Do you love your cell phone company? Not many people do. Most wireless carriers repeatedly find themselves on lists of companies with the least satisfied customers. But between AT&T (NYSE:T) and Verizon Communications (NYSE:VZ) -- the nation's top two best networks -- there has to be one that has more loyal customers than the other.
So let's take look at some independent surveys, network data, and industry indicators that point to which company has the most loyal customers.
The all-important churn rates
One of the best indicators for whether wireless customers are happy is the churn rate, which is the percentage of customers who leave a carrier each quarter. Verizon had a 1.00% churn rate in its latest Q3, while AT&T's was 0.99%. When it comes to churn rates, those are both great numbers. T-Mobile's is 1.6% and Sprint's is the highest at 2.18% right now.
So Verizon and AT&T are basically even with their churn percentages, with AT&T just slightly ahead. Churn rates aren't an exact science for predicting how happy customers are, but they are a good overall indicator that customers are satisfied or unsatisfied with a carrier.
The verdict: At least in the most recent quarter, AT&T takes the win here.
Customer service is key
A recent survey commissioned by Zogby Analytics for 24/7 Wall Street compiled a list of the worst customer service companies, and not surprisingly all four carriers made the cut. Unfortunately for AT&T, the company made it to the top 10, with the highest percentage of poor service ratings.
AT&T came in at No. 8, with 17.5% of respondents giving the company a "poor" rating. Verizon escaped the top of the naughty list this time, so we'll give it the win in this category.
The best for a while
But that was just one recent report -- how did AT&T and Verizon stack up against each other last year? Consumer Reports conducted a survey of more than 58,000 cell phone subscribers in 2013, and out of the nation's four biggest carriers Verizon came out on top. The company finished with the highest nationwide carrier score, followed by T-Mobile, AT&T, and Sprint.
While it didn't receive stellar marks across the board, it looks like Verizon's customer service has outpaced AT&T's over the past year at least.
This should make customers happy
Earlier this year Verizon earned the best "overall performance" rating from RootMetrics -- for the second time in a row. The company beat out the competition in network reliability, speed, data performance, and call performance.
And Verizon's network investments haven't gone unnoticed by customers. In a recent investor note, Morningstar analyst Michael Hodel said, "We believe Verizon Wireless' continued strong customer loyalty indicates that a large percentage of customers choose the firm for attributes it controls directly, including its network reputation."
But while Verizon's benefiting from its strong network, AT&T is nipping at its heels. The RootMetrics data shows "the separation between Verizon and second-place finisher AT&T was small."
That means AT&T customers are probably happy with their network too. In addition, Hodel mentioned in a separate note that the company recently moved some customers to lower priced plans, which "continues to produce strong customer loyalty, with customer defections remaining at a record low level."
So though Verizon has a stronger network than AT&T, it appears AT&T knows how to keep customers happy on its network as well. Let's consider this category a tie.
There can only be one
Just last month, Consumer Intelligence Research Partners (CIRP) put out a report on cell phone loyalty rates and found that between July and September of this year Verizon had the highest loyalty rate among the top carriers, while AT&T's fell behind. CIRP's data showed Verizon retained 89% of its customers in the quarter, while AT&T retained 85% (excluding new customer additions).
So while AT&T and Verizon are almost identical in churn rates, network quality, and customer service, Verizon customers are just a bit more loyal to their network. Though it's likely AT&T could catch up quickly, for now this should be good news for Verizon investors, considering it adds to the benefits of being the nation's No. 1 carrier.