Monday, July 20, 2009

How does this work?

How can an entire industry with millions of customers be terrible? You might have guessed I'm talking about the cellular telephone industry, but in reality I could be talking about several different sectors. I'm going to focus on the cellular industry in spite of the fact that it's so common for people to complain about their carrier that it has become quite tired to hear people do it. I mean who cares to hear about how bad someone else's carrier is when your own carrier is so bad?

The thing here is that it seems that every single carrier has serious customer service issues. Everything from the technical side of the world (no coverage in needed areas, data being slow, etc) all the way to a complete inability to solve basic problems with billing or even selling proper accessories. Companies have come and gone and consolidated and been acquired and sold and split in so many different ways it's crazy. But the only result of all this seems to be things stay the same or get worse, never better.

Companies only seem to get customers by acquiring them, by having an exclusive phone contract (can you say iPhone?), or having coverage in just the right place. But I think a poll of cellphone users would find that there are very few that don't have serious problems with their current cellphone carrier. That carrier just happens to "suck less" than everyone else.

So how does this happen? How can there be no room in the market for a company to actually do a good job of solving the customer's needs? I have no idea. I do know I don't see any of the current carriers doing anything much to make the situation better. AT&T doesn't seem to be expanding their current network to new areas, they're just making the data side faster where they currently are. Verizon is stuck with none of the new wave of awesome smartphones (iPhone and Palm Pre). Sprint has always had network coverage problems in big ways, so they went and bought Nextel, which was worse. Yeah, that makes sense.

My theory on how these things happen is that the stock market puts so much emphasis on growth yet very little on actual, oh, profit that companies make decisions based on growth. And when they have a captive customer base (we all require cellphones in our lives now), well, it's easier to acquire/merge/whatever than it is to do the right things to take your competitors customers. The contract model seems to also hurt their ability take customers with upgrades in actual customer service. Perhaps it's time to end that as a major business model? Or at least regulate the telco industry again? I really don't know, but I know there's something significantly broken right now when an industry so large can suck so bad.


Jane Elizabeth said...

so this is not an uncommon issue in various industries. The cable company comes to mind. Possibly some of the worst customer service with dramatically escalating prices. The alternative, satellite, can be no better for some people than cable. Health insurance is another(at least dealing with it from a provider standpoint). It is probably the most frustrating thing I have ever dealt with. Unfortunately, in that industry customer service is never measured from provider standpoints.
All I can say is this:
Can you hear me now?

Donnie Barnes said...

I agree with all those industries and these days I'd even include banking to some degree. It's sad, really.

Travis said...

Believe me Donnie, nobody realizes that the wireless telecomm industry is more of a war of attrition than the carriers themselves. I wish there were some sage thing I could say in our defense, but when it comes right down to it, I don't have much of a defense to muster. There are so many factors contributing to "customer pain points" in our industry. Anything from government regulation, offshoring costs, stock price fixation, etc.

However, I will say that if you look at the meteoric development of the industry, you have to cut us a little slack. We haven't had as much time to "perfect" things as many other industries and I assure you, it will get better as competition gets stiffer and it becomes more difficult to simply purchase competitive advantages.

Also, if I may be permitted to plug my own company, we keep all of our customer service centers here in the U.S. (ahem, ATT). We routinely receive the top scores for network speed and reliability. And while we may not always have the hottest handsets all the time, all I can say is, stay tuned.

Donnie Barnes said...

Thanks, big-T. And Happy Birthday. :-) But don't feel like I'm picking on just you...the cell industry was just the best recent example. There are so many industries like this and it just kills me to imagine how we've let customer service go so far south for so long in so many places. The wired telco arena has been bad for a few years now, cable, satellite TV, banking, air travel, etc. The list is just too long. But if the cellphone industry is near turning it around, well, that would be great. I do feel like the ATT exclusive on the iPhone has been bad for the industry to some degree, but I do also believe Apple has a right to produce the phone as JUST a GSM device if they wish. Given that, well, they still wouldn't have had any real competition in the marketplace since neither Sprint nor Verizon is GSM, and those are the only two companies in any position to actually compete with ATT, IMHO. *sigh*

Travis said...

Thanks Donnie! Don't worry, I didn't take it personally. You're absolutely right. We live in a price-dominated society and price is directly correlated with cost. Unfortunately, as a society we've been programmed to focus on price and not the total value. Turns out the customer service is one of the easiest places to cut. ATT certainly changed the game. Now every carrier wants an exclusivity deal in order to launch a phone. It's become just another area where customers are forced to compromise and it's one of the first things we talk about when preparing to launch a new device. I find myself torn because it's one of the few ways to gain an obvious competitive advantage, but it doesn't do the consumer any favors.