US Users Loyal to Their ISPs

Most US Internet users would rather pay a higher monthly service fee to their current ISP than switch providers, according to Internet User Trends, an ongoing tracking study of Internet users by The Strategis Group.

The study finds that home Internet users are currently paying an average of $18.83 per month for Internet access. Participants in the study indicated that if their current ISP were to raise monthly service rates, more than half of those studied would pay $4 more per month rather than switching ISPs.

“Despite large scale customer churn and competition, a substantial portion of users would rather not switch providers,” said Matt Page, Director of Internet Consumer Research for the Strategis Group. “More importantly, an ISP may need to price 20-30 percent below market rates to lure competitors’ customers.”

The research indicates that Internet users would pay up to an average of $5.36 more per month before switching ISPs. This premium, however, varies substantially across geographic regions of the US. In the Midwest, the average premium was $6.12; in the West it was $3.68 — nearly 40 percent less.

The study also found that almost two-thirds (63 percent) of Internet users have never switched ISPs and that a large majority (88 percent) of home users did not anticipate changing or discontinuing service in the near future. Further, only 5 percent of home users indicate any dissatisfaction with their current ISP.

“It is clear from our research, that the majority of customer churn for ISPs has been related to a minority of customers who switch multiple times,” said John Zahurancik, Strategis Group Director of Internet and Telephony. “Customer loyalty does exist with regard to the Internet access business.”

The report is based on a nationally representative survey sample of more than 1,700 households, including more than 500 Internet users.

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