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Jouko Ahvenainen

Short-term traps kill long-term growth

I have previously written  about how frustrating it often is to try to get customer service from carriers. It was again time to do something about my mobile subscriptions. And once again I felt they want to trap me, and the only thing I can do is navigate to the least harmful trap. Carriers might make more money in the short term with the current attitude, but for longer-term business it is very harmful.

I have many mobile subscriptions and handsets. Last time I managed to find quite a good package for data and roaming for my primary subscription, when I really focused on investigating those. But, of course, the trap was that international calls were very expensive. And after getting a really big invoice, I started to investigate more. I actually found a package that I must ‘buy’ to get international calls for about 70% cheaper and the price of this package is zero (yes, zero, nil, nothing). Really, no one told me, when I took my subscription that I can get a package that cuts my costs by 70%, and I don’t need to pay for it, but I must spend a lot of time navigating their web site to find it and activate it. Is this really customer service?

I also decided to upgrade one of my handsets. I wanted to take a Blackberry Priv. I checked from my carriers web sites that it is available from them and the site also told me that they could deliver it in one workday for each store. So, I went to a store and explained that I want to get this phone. The sales person looked surprised. He asked “why do you want to get the Blackberry, I would recommend the iPhone or Samsung.” I said, “I have decided to take Blackberry.” And he continued, “we don’t sell Blackberry, but we have many other good phones.” I said, “in that case you have a problem, since your web site says you sell it.” And he replied, “yes, we can sell it, but we don’t have it in the store now, but we can order it.” I wondered why he first claimed not to sell it at all and now he admitted they can order it and they actually do sell it. Is this customer service?

Then he made me a new ‘package proposal’. It was over 50% more expensive than my existing package.  I was wondering, how can it be so much more expensive, when I didn’t really ask for anything new, except if they have a better package for international calls. He said it now includes minutes for international calls, but it also cut my included roaming minutes. So, how can it be so much more expensive? He started to explain that I actually save with this, if I have used my old package so that I have gone over included minutes and data limits. But I have never hit the limits. He continued to argue that this offers 70 times more data to me. But I have never used my old limit, why would I now take 70 times more? His answer was “it is future proof.” I basically told to him I’m not going to pay more than I have paid. Then he re-calculated and finally got about my current price, also including 5 times more data. Then I agreed to take that. Is this customer service?

Of course, carriers can feel they are very clever, when they make these complex pricing models and get people to pay more, even when they market them as saving customers money. But I would claim it is one reason for why carriers haven’t been good at finding new revenue streams and have become bit pipes. For example, now when my broadband and mobile carriers are merging, I’m very worried when they offer new integrated packages. I don’t want to take them, because I’m quite sure they are more complex to manage and more expensive to me in the end. I also feel safer buying apps, videos and music from third parties, even though on balance it could make sense to get them from the carrier. But I want a clear and transparent pricing, I want to know what I get and also be able to end the service whenever I want. For me the carrier’s clever pricing packages are always a potential trap, that’s why I prefer other parties for all services I don’t need a carrier for.

I know carriers often advertise that they have a new simpler and clearer pricing model. But I have seen too little development in practice. It can be culturally a really tough transition for them. Of course, some carriers are doing better than others, but on average they could improve a lot. These pricing models can optimize their revenue in the short term, but I would say these models and attitudes have been and are obstacles to really growing the business. They think they know better than their customers what their customers want. And in the end the customers hate that attitude.