Posts about customerism

Screwing customers is a business model

Bob Garfield continues his jihad against Comcast with a live podcast (oxymoron?) on December 11 featuring me on the same bill with Ralph Nader and Harry Shearer. Bob’s not letting up.

Yesterday, I sent Bob what I thought was astounding statistics from the oft-quoted University of Michigan’s American Customer Satisfaction Index on Comcast and cable and satellite TV, which reported that the industry suffers “the lowest level of customer satisfaction among all industries covered by ACSI.” Yes, even worse than airlines, hospitals, and Microsoft. Yet, of course, they still make money money because they enjoy monopolies … for now. Says ACSI:

There seems to be an element of monopoly-like pricing in the cable industry: basic cable services rose 5 percent in 2006 and 93 percent over the past decade, nearly four times the rate of overall consumer prices during the period. Such pricing power usually comes with some level of monopoly protection and most cable companies have little competition at the local level. This also means that a cable company can do well financially even though its customers are not particularly satisfied. Comcast is one of the lowest scoring companies in ACSI. As its customer satisfaction eroded by 7% over the past year, revenue increased by 12%. Net income went up by 175% and Comcast’s stock price climbed nearly 50%. In the first quarter this year, Comcast added 75,000 new cable TV subscribers, a 49% increase, and posted an 80% rise in earnings over the previous first quarter.

In short: They can still make money screwing their customers.

But be warned, cable oligarchs: Your monopoly will end, as newspapers’ did. You will fall. But for you, no one will cry.

I wish Google would win wireless spectrum and use it to create an open network that will finally bring cable and phone companies the competition they, and we, so richly deserve. Cable’s business is built on telling its customers what they cannot do. Google is built on letting us do what we want to do. Cable needs an attitudectomy.

Dell Hell: The end?

My column reporting on my visit to Dell headquarters and my interview with Michael Dell just went up on Business Week. It’ll be in this week’s issue. Hell, it’s even the lead online.


After giving Dell hell two years ago, I may well be accused of throwing them a wet kiss now. It’s a positive piece. But it’s hard not to praise them when they ended up doing everything I was pushing in my open letter to Michael Dell. I’m not saying that I caused that, just that we ended up agreeing and they ended up seeing the value in listening to and ceding control to customers. They reached out to bloggers; they blogged; they found ways to listen to and follow the advice of their customers. They joined the conversation. That’s all we asked.

The column — and Dell’s executives — acknowledge the company’s ongoing problems — the complaints I still hear in comments and emails to this day. But still, I come away concluding that it’s a big deal that a company that was vilified as the worst at blogs, social media, and customer relations in the broad sense is now, one could argue, the best at this. The company’s executives wouldn’t acknowledge this, but I wonder whether falling so far is just what set them up to be so bold in the blogosphere.

In my first draft of the piece, I wondered whether Dell had even become a Cluetrain company. I had to abbreviate that to being “bloggish” because it just took up too much space to explain the Cluetrain. But as you read the column, note Dell’s compliance with the manifesto’s first three theses:

1. Markets are conversations.
2. Markets consist of human beings, not demographic sectors.
3. Conversations among human beings sound human. They are conducted in a human voice.

I don’t know whether this is the end of my saga of Dell Hell: the story come full circle. As I say in the column, I thought that end came three months after this began, when I returned my Dell. But it turns out that was the start of the real story.

* * *

I found another story here, a media story, which I come to at the end of the column:

Dell and its customers are collaborating on new forms of content and marketing, but note that they are doing this without the help of media and marketing companies.

Dell realized that engaging in the conversation wasn’t just a way to stop blogging customers like me from harming the brand. We, the customers, bring them great value besides our money: We alert them to problem. We will tell them what products we want. We share our knowledge about their products. We help fellow customers solve problems. We will sell their products. But this happens only if you have a decent product and service and only if you listen to us.

Once that relationship is established, it replaces the less-efficient, the shallower relationship bought through media. Bob Garfield wrote about this in his second chaos scenario piece: Marketers’ overall spending on advertising and media may actually decrease. So I believe this is a cautionary tale for the media industry.

* * *

Here’s video of my interview with Michael Dell. I’ll warn you: It’s not exactly scintillating. Dell is cautious — not surprising because he’s a CEO and also not surprising, I assume, because he was talking to me. I’ll say that I didn’t do a great job in the interview; I couldn’t figure out how to engage him on blogs.

* * *

Something else that didn’t make the story — because it’s of more interest to us bloggers than to a Business Week audience, I decided — was the question of Michael Dell’s relationship with blogs. Does he read them? Every one of his executives insist that he not only reads them but that he will send them links to posts at all hours of the day and night. Their insistence was so consistent that I wondered whether this wasn’t on the Jarvis interview briefing sheet I saw on one employee’s Dell screen.

So will Dell blog? Not likely. He has been known to submit a comment in response to an idea on IdeaStorm, where customers tell him what to do. But blog? The execs fairly shuddered at the idea. I’m not sure why. I guess Dell just isn’t a bloggy kind of guy.

* * *

I spent a very full day at Dell’s headquarters near Austin and also got a tour of their factory. I got lots of fascinating business intelligence and crammed as much of that into the column as I possibly could. I’ll probably blog more of it later. The execs I met at the company — heads of customer service, marketing, ecommerce, PR, and blogging outreach — were gracious and generous sharing their experiences and views with me. In other words: They didn’t seem to hold a grudge.

: LATER: This report about me collaborating on a Dell book is utterly untrue. I have no idea where it came from and have asked that it be corrected. I find it particularly damaging that this should be ‘reported’ on the eve of my column’s publication. I may well write about Dell in a book but not in collaboration with Dell.

: LATER STILL: Steve Baker of Business Week suggested I post the original draft. Here it is. The story was submitted at 1,600 words. It ran at about 1,100 words. Some trims always help. A few hurt. It’s still not what Jay Rosen asks for but I have more in my notebook and will be using that later.

Comcast must listen

I want you to invent the ideal cable company. That may sound oxymoronic or just moronic, but I want you to try. Here’s why:

Bob Garfield continues his jihad against his cable company (and, by extension, all of them) at Comcast Must Die. He is inviting fellow cable-sufferers to come in and tell their tales of the foe. Garfield charges his congregation: “Congratulations. You are no longer just an angry, mistreated customer. Nor, I hope, are you just part of an e-mob. But you are a revolutionary, wresting control from the oligarchs, and claiming it for the consumer. Your power is enormous. Use it wisely.”

Of course, parallels have been drawn to Dell Hell, of which Garfield confesses a tad of jealousy.

If Dell can reform — and that’s what I’ll be asking in the magazine piece I’m writing on them, which has now been delayed a week — then can Comcast? Of course, it can. Any company can. Or it can die.

But it’s worth asking the definition of reform. What would a good cable company look like? How would it act? I’ve just reread the open letter to Michael Dell that I blogged in August 2005. I’m not saying they followed my advice but they did end up doing what I suggested and I think they and their customers are better off for it.

So what should Comcast do? Under my post about airlines as prison wardens, Brett Rogers suggested that we should imagine what a good company would look like in various industries (and then hold them up to that standard). He wrote: “I haven’t looked for one, but why not create a venue where people can describe their dream ____________? Could be airline, could be mortgage company, could be dentist. Let people collectively brainstorm what could be, instead of just collectively complaining about what isn’t. Business plans by customers, rather than by an executive or two. If such a venue already exists, what is it?”

I love the idea, Brett. So let’s make this that place. And let’s start with the cable company.

What should a cable company be? What would make us love our cable company? Sounds like a stretch to even imagine, but why should any company hold itself to any standard lower than that. Now that we, the customers, are empowered, companies must recognize that we are in control and that they can no longer build business models on telling us what we cannot do.

It’s not our job as customers to worry about the business models of the companies that serve us, if they want to serve us. We do need to be realistic. But we should not assume that we know the definition of business realism. In the midst of Dell Hell, commenters to this blog said I was nutty to think that Dell could or should reach out to customers who blogged about their problems. But, in fact, that was the first reform Dell made and they’ll tell you that it was a great move that helped them solve problems efficiently and learn more about their products and customers and get good PR, to boot. So don’t get crazy with your wishes, but also don’t restrain a great idea.

Here’s my shot. Please add yours. Here’s my ideal cable company:

* I want my cable company to treat me with the respect it would give a business and issue me an SLA (service-level agreement) that guarantees me uptime, speed, and response time to problems on the internet, TV, and phones — with penalties if they fail. If a gas station can’t pump gas, I don’t pay them anyway. If a cable company can’t pump bandwidth, then I want my money back — plus. And if it’s mission-critical for me, it needs to be mission-critical for them.

* I want my cable company to guarantee that they will not restrict any content on the pipe I pay for. Let network neutrality start at home.

* I want my cable company to offer wi-fi all over my town and to come to roaming agreements that let me get wi-fi anywhere I travel. I’m willing to pay more for that. But I want it.

* Let me choose what channels I get. (Yes, I know that cable companies make money off of bundling but they need to shout back up the stream and change their relationship with the channels to make this happen or we’ll all revolt against both.)

* Give me the ability to watch the programming I’ve bought whenever and wherever I want, without having to pay extra on-demand fees or program my TiVoesque thing or buy a Slingbox. If I bought it, I want to watch it on my terms, damnit. Kill the schedule. For that matter, kill the channel. Serve me anywhere, not just at home. (And, yes, I know there are copyright challenges but the industry better figure this out or their stuff will be left behind.)

* The wise cable company will seamlessly merge programming from broadcast, cable, and the internet. I shouldn’t care where it comes from if I want to watch it.

* The wise cable company would enable the people formerly known as the audience to become critics, recommending programming to each other as part of their system. If cable companies had a business model built on desire — I want to watch that — rather than on mere monopoly, it would serve them and us so much better.

* And the wise cable company would realize that peer-to-peer would save them money, used well.

* The strategic cable company will start to think two-way and realize that many of its customers are creating, not just consuming. So give us the means to host our stuff.

* I want a means to report bad employees and know that action has been taken to fix the personnel problems that give these companies such a terrible reputation with their customers.

* When they have to come out for a service call, I want a guaranteed time. If something beyond their control happens, then I want to be notified. If they don’t do this, I want to be paid for my time.

What does your ideal cable company look like?

One more thing: If Comcast is smart, it will enter into a real dialogue — not just unconvincing apologies — about what it should be on these sites and with other blogging customers. Watch Dell.

Airlines: Imprisonment as a business model

Air travel may be the first industry based on a business model of kidnapping and imprisonment. It is the least open industry possible. You are trapped with the airline that controls your home airport or destination. And now, far worse, you are trapped in their planes for three to five hours. And why? Well, yes, we can blame weather and bad air-traffic control for some of this. But the essential reason is that that don’t want to let you loose and lose your fare. So they hold you captive. Amazingly, they are allowed it. And, of course, this yields just the amount of resentment and seething hatred it deserves. So no one thinks positively of the industry or the brands in it. It’s so bad that it’s making clearly inferior competitors — driving for hours, Amtrak, ferchrissakes, and maybe even soon the bus — look better. That’s bad. The entire industry and its relationship with its entire customer base is broken.

The attempted solutions so far are all nonsolutions: Attempts to regulate and limit our imprisonment — to still obviously unacceptable levels — have failed. Attempts to sue airlines into civility have not worked. Even the White House finally recognizes the problem but its solutions are aimed at reducing the flights that are already over subscribed; gee, that helps.

It’s time to turn the thinking around. If, for once, anyone in the industry or the government would think like a customer, the solution would be the reverse of imprisoning us in airplanes until they can take off:

Jets should not be boarded until they have a take-off — and landing — slot.

That leaves us, the passengers, free to walk around in the terminal — and, yes, free to seek competitive means of transport (other airlines, cars, trains) or to go home. In no sane world should we be held in captivity and prevented from that free choice. We would have the services of airports at hand — which, in the long run, would improve because there’d be business to be made there; demand for beers yields supply of beers (the mixed-nut marketplace shifts from the jet to the terminal). The airlines would compete to make us comfortable to keep us at their gates. The jets would not be sitting on runways burning incredible amounts of fuel and producing incredible amounts of carbon for hours on end. Onboard crews would not be stressed dealing with righteously angry customers. People might actually decide to fly more often. Oh, yes, this shifts some of the logistical burden of air travel from taxi and air traffic control to the terminals — fine. It also shifts the pain in this relationship from the powerless customer to the people who are in a position to fix the situation. If the airlines want to imprison us, they still have the tool of the nonrefundable ticket, though the market will in the long-run dictate whether we choose to pay for this discount with the risk of captivity.

It’s hard to imagine an industry — other than prisons themselves — that is less open to openness. It’s much easier to imagine how media, retail, consumer products, and entertainment can spawn Cluetrain companies. But if you simply turn around and ask how customers would run these companies, you will get an answer like mine, not like the industry’s or the government’s. The problem is that, deregulation aside, it’s not a competitive marketplace. It’s worse today than telecom. So it’s not as if one company can break away from the pack and think like its customers; it’s not in control of its relationship with us, end-to-end. How do we get from here to there?

The only thing that is new is our empowerment as customers on the internet. We can coalesce and gang up on the airlines. There is also market pressure. The horrid shoddiness of the mainstream airlines is just what has opened up the market for Eos, Silverjet, et al to offer independent, quality competition and take away the big airlines’ most profitable customers, who are all turning their backs and saying nya-nya-nya to their former wardens as they leave the prison gates. But, of course, that marketplace is limited. It’s a much bigger mess than that. And it won’t be cured until the industry starts thinking like its customers, which will only happen when the customers shout so loudly, now that we can, that the industry can’t help but hear.

In the end, the ability of companies to make a business by telling customers what they cannot do is over. It’s only a question of when and how it is replaced.

: I should add that when I flew to Austin this week to see Dell, my Continental flights were ontime both ways — though I saw a chart yesterday (can’t find it now) showing Continental as the current leader in passenger imprisonment. I was lucky to get a first-class upgrade both ways, which improves one’s outlook.

Cable companies must die

Bob Garfield goes properly ballistic against Comcast. We all have our horrible stories of waiting for the cable guy but this is a classic and Bob does a good and anally retentive job of chronicling the horror, the horror. The only thing that would have made it better is if he had recorded it — Bob is, after all, a Big Media Guy — and turned it into YouTube hilarity.

Call me an optimist, but I believe that every company — every industry — that makes its money by screwing its customers is doomed. We, the customers, can now coalesce and gang up on them and show them who’s boss. Yes, I’m thinking Dell Hell and its apparent turnaround. But this works only if the companies live in fear of losing us — that is, if they have competition. And this, of course, is why cable companies, phone companies, insurance companies, power companies, and other monopolies and duopolies — not to mention government — keep thinking they have us by the balls, out of which they can squeeze their money. But I think their day will come. New technologies could kill or at least bring competition into telecommunications. The insurance mess is finally going to get so bad that government will have to step in to fix it. Politicians themselves will have to learn that we can use these new tools to defeat them. The question is how we can speed this process up.

Well, Bob Garfield is an expert in media — as the cohost of On the Media — and also in advertising — as the critic at Ad Age. So I’ll throw the challenge back to you, Bob: How can we set the agenda on our dear communications ball-squeezers? How can we make their lives a living hell, like they make ours? How can we put pressure on those in power to take the power away from these horrible companies? How can we show their would-be competitors that there’s a great opportunity to come in and displace these fat and venal fools?

Let’s invent antiadvertising. Or maybe it’s unadvertising. Or customertising. If they can use media and messaging, so can we.

So, Bob, why don’t you make a commercial — not just a blog post, but a cool and slick ad — telling people why Comcast must die (your words). If it’s good — which, if you make it, it must be — and if it says something people want to hear and say themselves — and we know everyone shares this sentiment — then they will pass it around. Thank you, Google and YouTube. Maybe we can make a contest of it: make commercials against your least favorite companies. Free creative. Free media.

What if customertising takes over and beats advertising? Then we’d all go seek out customerisements and the ones with the fewest screeds out there must be OK.

I hate to be so negative about this. But as you can see in Bob’s screedlog, as we all know, the anger and frustration just build up until you have to scream.

Well, from now on, instead of screaming, expose the fools. Record your entire encounter with the cable company — every phone call, every visit — and use their failures against them. Our day has come. Or is coming.

: LATER: I missed the obvious name — customercials.