The business of making your customers unhappy
A story in the Wall Street Journal details the sharp rise in Comcast customer complaints from 2015 on, after the company set up its broadband data restrictions, or data caps, which meant that growing numbers of clients have found they quickly reach their data download threshold, and must either consume less, or pay more.
The strategy, which other telecoms companies are now following, is in response to the streaming offered by Netflix, Amazon, Sling TV, Apple TV, Spotify, and others. In short, Comcast and others are using a business strategy that involves holding their customers to ransom.
Companies defend this practice by saying that we are consuming larger and larger amounts of data, way beyond anything imagined even a few years ago: we are all data hogs now.
Can a company really think that pressuring its customers in this way is sustainable? Surely all that’s going to happen is that the customers will fight back. But in the United States there are few options: an internet provider comes into your neighborhood and that’s it, there’s not much consumers can really do. Also, let’s be honest here: most telecoms providers already know their customers hate them but have no choice but to stick with them.
Which is why companies use tactics such as zero-rating to position their services against over-the-top. In other words, if you consume content via Comcast’s television service, you’ll have not limit, but if you choose to watch Amazon, SlingTV, or Netflix, you will. And the same applies if you try to watch stuff on your smartphone: it will take an eternity to download and buffer.
In an age of abundance in all regards, we now find companies who want to make a living not just out of imposing limits on that abundance, but that see making life difficult for their customers as their basic strategy. What’s more, it’s not easy to control broadband consumption: the same content can generate different levels of consumption based on the device being used, quality adjustments, or as happens with mobile devices, having applications that regularly update themselves even when not in use. This generates clear conflicts of interest, and even fraud: to earn more, a company only has to make its clients believe they have used their data tariff up, even if they haven’t.
Contrasting with the pragmatism of “you’ve paid this much and you can only consume this amount, game over,” there are companies out there that still think along the lines of “I want to help meet my customers’ needs.” The idea of the former is to see internet as a cable through which to sell your products, rather than being a channel that your customers want to use to access whichever service they see fit. Keep your head down, ignore the flak, and continue making money.
Time will tell whether such an approach is sustainable in the long run, or if it will lose you your customer base to the first company to offer a viable alternative.
(En español, aquí)
