It is not sustainable to build a business model based on irritating and frustrating your customers
The words in the headline are not mine, but those of Neelie Kroes, the European Commission’s Vice President in charge of the Digital Agenda and Telecommunications. She spoke them last Thursday in Madrid at a breakfast organized by Forum Europa, during a speech in which she outlined her long-standing fight against abusive roaming tariffs. What she said was so sensible that I couldn’t help sharing it on Twitter at the time.
The mentality of telecom operators is something that I have written about on many occasions, often in terms similar to those of Neelie Kroes: I am amazed how companies with huge resources and that are able to roll out huge infrastructure projects are unable to understand something as simple as customer relations. In many cases it’s as though these former state-run monopolies are just unable to come to terms with the new realities of the market, and cannot shake off their old ways.
Telecommunications companies, with few exceptions, still enjoy the same reputation all over the world: they annoy and frustrate their customers. This is particularly evident if we bear in mind that telecommunications is a business that can optimize variables such as the intensity of data and permission levels: these companies are not just potentially able to access a large amount of information about their customers that they could use to offer an optimum service based on their needs, but they also have communication channels through which they could establish a reasonably good relationship.
Instead, these companies spend their time coming up with incredibly complicated products that they themselves do not understand, with tricky clauses and small print that always leaves you with the impression that you are being conned, along with absurd restrictions that lead to frustrating situations, and with a customer interaction model that inevitably makes you want to hang up the phone when they call you. How could things have gone so wrong?
Telecommunications are an important part of our lives. With each day we rely on telecommunications more and more to be in touch with people, but also to access data, store it, share it, to know where we are or how to get somewhere, or for a wide range of other activities that present themselves as a skyrocketing number of apps make them possible. Some telecommunications applications are even used by us in emergencies, while there are others that are not so important but that we have grown used to having available on demand, otherwise they make no sense.
As technology progresses, telecommunications play an increasingly important role in our increasingly interconnected lives. But amidst this scenario something is wrong: the company that theoretically provides us with all these connections is not up to the job.
Being ripped off to send data across borders is something that with the help of Neelie Kroes will soon be a thing of the past, at least within the European Union. But these same companies will, like the vultures they are, soon hit back as soon as we set a foot outside Europe: the idea of having to disconnect the data access on your cellphone when you arrive in another country or to be practically obliged to use a local SIM cared if you don’t want to be bankrupted will remain part of our lives for the foreseeable future: an illustration of the ridiculous lengths these companies will go to in their efforts to keep their customers trapped in what is clearly an unsustainable relationship. The sad thing is that this absurdity extends way beyond the question of roaming.
Telecommunication companies dedicate their efforts to holding their customers hostage, making them sign long-term contracts and that instead of using these long-term contracts to show them what a great service they can offer, spend their time torturing and abusing them to the point that they are desperate to escape. Recent initiatives by companies like T-Mobile with roaming or like Spain’s Telefónica unblocking phones, eliminating long-term contracts, or beefing up their customer service are undoubtedly the way forward, but they are not enough. What are really required are measures that go much further, and that are related to the ability to understand the needs of the customer.
What customers want are sustainable relationships, not ones based on maximizing profits at any cost, to the point of insult or fraud. Every time a customer learns of an offer that would have allowed him or her to save money, that customer feels cheated, and it exposes how the complex pricing and product structure has been created simply to squeeze the most out of us, an illogical structure wherein there is no relationship between costs and service.
Is it really so hard to understand that a customer is not a kangaroo, a dolphin, or a whale, but a customer with a name and a face about whose needs you should have detailed information? Is it so difficult to think in terms of a customer who doesn’t want packages of X minutes per day, with Y text messages, or Z gigas of data, but instead, simply wants to use the services he or she needs, when they are needed? Is it so hard to understand that your customer wants to download something now, at this moment, but that you are forcing him or her to do so at a pathetically slow speed because he or she has used up their data limit, and who will be cursing the families of each and every one of your companies’ employees?
Why force customers into deals that do not suit them by reducing their data access or by charging them an arm and a leg when it would be so much simpler just to give them what they want and need? Why not use the information they have about their customers to adapt our products and services to their needs, and in this way, really win their loyalty, instead of offering them a straight jacket? The sad reality is that most of the time, we assume that our telecommunications provider is ripping us off, that we are paying far more than we would be if we were able to understand the contract we have signed.
The sad reality is that as telecommunications become more and more important in our lives, the companies providing us with them have no idea of the concept of the “partner that helps us” and is much closer to being “the enemy that is ripping us off”; an enemy that forces us to be constantly checking our bills, comparing our prices with that of our friends, to turn our phones off when we travel abroad, to navigate carefully as we approach our data limit, and to threaten to go to another company to get a better deal. This is an enemy that will only stop ripping us off, literally, when the Vice President of the European Commission in charge of the Digital Agenda and Telecommunications forces them to do so. This is a relationship that is not sustainable, is utterly below acceptable standards, and is built on a series of radically wrong premises.
How much longer will telecommunications companies continue to build a business model based on annoying and frustrating their customers?
