I’m sure many others are laughing along with me as Comcast and Verizon spend ridiculous amounts of money attacking each other on TV, stretching truths and greatly exaggerating the other’s fallbacks. As is true of virtually all negative advertising, the message about customer benefits gets diluted in all the bickering. When it concepted the campaign, Verizon likely was aiming to replicate Apple’s “Get a Mac” ad series success, portraying a Verizon technician as cool and clean cut, and his Comcast counterpart as disheveled, overweight, and anything but hip.
But alas, Verizon is no Apple. Apple delights with elegantly designed products and fuels demand with brilliantly executed clean and bold marketing. Verizon is inherently disadvantaged as a tech hardware and infrastructure company. There’s no argument it provides cool services, but it cannot create the same emotional connection, because these days a landline phone connection is BORING, wired broadband is a commodity, and credit for the sharp picture in your living room goes to your high quality HDTV.
But enough with the Apple comparison, as that is not the focus of this post. My point is simple. The hoards of cash Verizon and Comcast are spending to one-up the other in this fight would be far better invested in sophisticated CRM systems.
No question, price and number of HD channels are two factors to consider when choosing a cable provider. And internet speed is important. But at the end of the day, are the companies’ capabilities really all that different? On the other hand, if you buy a bundled package (i.e. at least 2 of these 3 – phone, internet and cable), before long you’re bound to have a technical issue with at least one of them. Lord knows, FiOS has had numerous outages and glitches since I started using them around 2 ½ years ago. Working in the high-tech/internet space, I understand complex systems sometimes fail and service upgrades often don’t go quite as planned. So, I’ve been patient with FiOS as they’ve gone through their growing pains.
But recently, when my credit card was triple charged almost $300 (i.e. $900 in total) due to a glitch on the FiOS website, I wanted answers, and I wanted them immediately. The fact that it happened in the first place is very disconcerting. That I still don’t have the issue resolved a couple of months later after speaking to over 10 Verizon reps (including a couple in the Collections Dept.), is inexcusable.
My initial experience with FiOS was great. The installation was fairly smooth, a local manager stopped by to inspect the work and ensure my satisfaction (he even gave me one of his cards), and they waived the installation fee of an extra phone jack for my fax machine. Judging on this one-time event alone, I would give FiOS a solid “A” for service. Therein lies the difference between simple customer service, and its far more powerful cousin CRM, which requires deep commitment to put systems, procedures and people in place to foster relationships with customers throughout the life cycle. It is here that FiOS has failed.
As one of the first subscribers in my town who’s still with FiOS, by definition, I am one of their longest standing (i.e. loyal) customers. My guess is I’m also in their upper tier of monthly spend at ~$160. And perhaps my best quality of all: I always pay my bill on time. Undoubtedly, these are 3 of the most important factors in assigning value to FiOS’ member segments. Not rocket science.
So CRM 101 should reveal to FiOS that if nothing else, I’m an above-average customer. Work even a little to keep me happy (e.g. a priority 800#) and show me you care (e.g. actually call me back when you say you will), and there’s a good chance I’ll stick with you. Take it to the next level and show you understand early adopter = influencer with potential for real evangelism, and watch how many people I bring to your service. And if segmentation is too much to ask, at the very least try following the no longer new Web 2.0 trends and establish a presence on social media channels, such as Twitter. Score one for Comcast, which is leaps and bounds ahead with its @ComcastCares initiative. Obviously Twitter alone is an insufficient strategy, but it symbolizes Comcast’s commitment to differentiate on service.
Disclaimer: It is likely the commentary below applies to a broader set of rental car agencies, but as I have been tracking the Hertz website over time, my complaint is directed at this one company.
As a Hertz Club Gold member, I book with the company on a regular basis. And each and every time, I am amazed at how they try to take advantage of their best, and presumably most loyal and lucrative, customer segment. If your sole aim is to book as quickly as possible, or price isn’t a primary concern, you can easily pay 50% more than a typical visitor to the website.
For a recent one-day reservation in Las Vegas, I compared three different rates for a daily rental: 1) the standard rate (i.e. no discount code), 2) the “exclusive” Gold rate, which requires log in, and 3) the AAA-promotional rate. For a midsize “Madza 6 or similar” rental, the rates were $45, $65 and $19 respectively. That’s right, the “loyalty” rate was $20 higher per day than the rack rate and $46 higher than the AAA rate (which did not even require validation). Fortunately, you can still book the lower promotional rates while you’re logged into your account; you’ll just need to know (or learn) your way around the site and be willing to spend more of your precious time.
Yes, I am quite familiar with the business rationale behind price discrimination, but these rates were available on the same Hertz.com website at the same exact time, and none of the rates required manual entry of a coupon code. It seems to me like Hertz feels entitled to collect a huge premium in exchange for the convenience of having a car waiting when you arrive at the airport, the one real perk of a Club Gold membership. No wonder why it’s so easy to have the $50 initiation fee waived.
There’s always the chance, however slight, that Hertz has done thorough pricing analysis, and from a pure revenue optimization standpoint, this has proven the optimal result during the testing period. Still, I imagine that many other frequent travelers have had the revelation that Hertz considers gouging its premier customers as sound business practice, which no doubt has led to negative sentiment towards the brand. I’m relatively certain Hertz has no clue what that bad will translates to in terms of lost revenue in the medium to longer term.
So I’ll start off by admitting that I’m in a bit of a funk today. I don’t have much of an explanation, except that it’s Monday. The weather’s actually quite nice for early May in New England.
Right to the point. I have two beefs, and I’m going to cover them together, because neither is worthy of a post on its own.
My first one re-visits Starbucks’ pricing. I’m already bitter that not all Starbucks (e.g. airport locations, Barnes & Noble stores) accept my Starbucks card (yes I understand why), so I pay 40 cents extra for soy milk. Today, I ordered a tall latte with an extra shot (a regular tall has only one, so what’s the point?) and I realized I paid the same price as a grande (which has 2 shots), except a grande has quite a bit more steamed milk. I looked more closely at the latte pricing and noticed that adding a shot to a grande makes it more expensive than a venti (which has 3 shots and also a lot more milk). Yes, I’m familiar with the concept of volume pricing, but in principle the regular price you charge for a larger size should at the very least be higher than the price for the smaller size. Why? Forget business sense. Because if you don’t follow this common sense principle, consumers are bound to be bitter once they figure it out.
The other one strikes a chord, because it relates to a personal pet peeve I’ve already blogged about twice in my Turner Broadcasting and BMW posts. Pepsico already has egg on its face over the Tropicana fiasco. And now, a chief marketing pitch for the new Gatorade drink G2 has an obvious grammatical error (see Google search results image at top). The page and tons of other ads are plastered with the phrase “Less Calories” (instead of “Fewer Calories”). This should never have made it past even the most junior copy editor. Truly embarrassing!
I admit I’ve used VistaPrint several times now for business cards, address labels, even invitations for my wedding brunch! Plain and simple, the quality of the product is excellent, the prices are very competitive (you can get 250 free business cards and only pay shipping), and there are almost always web coupons on couponcabin, retailmenot and the like. (If you’re a repeat customer, you’ve likely received these coupons directly with your merchandise).
BUT, if I were not a savvy internet consumer, I would be extremely frustrated (at the very least) and angry (more likely) at the overly aggressive cross-sell and upsell tactics used on the website. As I understand it, VistaPrint heavily relies on this for its success.
Don’t get me wrong, as a marketer I strongly advocate increasing transaction size while you have a visitor captive in the shopping cart funnel (and even before). But VistaPrint takes this way too far; they clutter the screen with tons of add-ons, making it difficult to differentiate between your selections and their recommended items. Navigating to the final purchase page takes way too much time. At one point they even force you to choose between 2 options, one reconfirming only your items and another with their selections added. And if I’m not mistaken, the latter is placed at the top of the screen, requiring the user to scroll below the fold to see his original order. It’s truly a miracle if you make it through with only the merchandise you intended to purchase.
And it doesn’t stop there. After you complete the transaction, for a limited time, VistaPrint offers a discount on additional quantities of the same merchandise and other related items. The first time I experienced this, I was really PO’d feeling as though I had paid too much. Now I’ve learned to game the system and place half of the original order at the higher price, then add the other 50% afterwards at a lower price. (Note: it takes only one extra click of the mouse to do it this way). I’m assuming VistaPrint doesn’t want to encourage this type of behavior, but who wouldn’t quickly figure this one out?
I’m left scratching my head. How has VistaPrint been able to get away with this for so long? They appear to be the market leader, but similar services are available, so at least to some degree, competitive forces are in play. Are VistaPrint’s prices so attractive that consumers simply tolerate it? Do they have far more variety and customization options? Do they market better than everyone else? Do they primarily target SMBs who can often make use of their complementary product recommendations?
I have to believe that ultimately in targeting individual consumers, companies must follow the guiding principle – “Generating higher sales at the real detriment of user experience may increase near term sales, but will be unsustainable in the long run.”
This post is a bit off-topic for me, but as I recently bought a CPO (certified pre-owned) car, I was directly impacted, and admittedly I am slightly bitter.
Have you heard of Obama’s special 2009 tax break for new car purchases? It allows people to deduct state, local and excise taxes on their 2009 tax returns.
Here’s my beef.
If the deduction is primarily intended to help struggling US auto makers, then why make the credit applicable on imports as well? Since domestically produced cars cost less on average, the consumer benefit in absolute dollar terms will on average be greater for foreign car purchases.
If the deduction is primarily intended to stimulate consumer demand, then why make it applicable only on new cars? Relative to disposable income, the deduction is more meaningful to lower income individuals and families – who are more inclined to purchase a used car – than Americans buying $50,000 luxury sedans and SUVs (Note: $50K is the threshold where the tax benefit ends). And since relief is on a percentage basis, including pre-owned cars would not likely discourage discerning consumers from spending a premium on a 2009 model.
Aside from these arguments, if consumers deem the credit meaningful enough so as to alter their buying behavior and upgrade from used to new, used/new car inventory would go out of balance (esp. given heavy discounting on new cars today). If used car inventory levels creep up, automakers will lose pricing power on new vehicles. Naturally, the market would correct for this, deflating used car prices until the balance is restored. Unfortunately, the burden ultimately falls on the consumer, who now collects a lower price for his used car when he looks to trade it in to the dealer or sell it to a private party.
BMW should learn a lesson from Turner Broadcasting’s recent gaffe. Two month’s ago, I blogged about the incorrect English used in the prominently displayed message “More Movie, Less Commercials” on all TBS and TNT home movies. This message has since been removed.
Well, it seems BMW (a German company with a huge presence in the U.S. to know better) needs to retake the same 7th grade grammar lesson. Featured in the top banner on the BMW main home page is the following phrase “Less emissions. More driving pleasure.” Of course “Less” is incorrect in this context and should be replaced by “Fewer” or “Lower.”
Some might say you really can’t count emissions, so “Less” is appropriate. To those, I would argue that they are using the term “count” too literally. We can certainly measure the number of grams of CO2 a car emits, just as we can measure the number of calories we eat. Surely you don’t wish to argue that “Less Calories” is grammatically correct…
I just don’t get how a brand that is so refined and meticulous with its engineering, styling and design can be so sloppy in its marketing. Without a doubt, this one of the most heavily trafficked pages on BMW.com – the first page people visit when coming to the website – and therefore the company’s first opportunity to make an impression. (Actually it shouldn’t be among the most frequented pages, as I’d expect BMW would cookie me and automatically redirect me to the USA site for future visits, especially if I’m connecting via a U.S. IP address, but we’ll leave that gripe for another day.)