Archive for the 'Captive Consumers' Category

The CEO of Sprint Nextel , Gary Forsee, resigned today because of the mobile carrier’s appalling loss of subscribers and financial performance.

Why is this significant? Because in an industry that is probably the very worst at customer service, Sprint Nextel is the real pits, and the man who let this happen has finally paid the price. As we explain in the chapter in Punk Marketing called ‘The Captive Consumer,’ companies that spend all of their efforts enticing customers in with slick marketing and empty promises and then treat them like burping pigs when they’ve signed a contract with them, will suffer in the long term. The threat of early termination fees (the money a customer has to spend to be released from their contract when they realized they’ve been duped) doesn’t create customer loyalty, it just adds to the bad taste in the mouth that poor aftersales support leaves.

According to Sprint Nextel they expect to report a net loss of 337,000 monthly postpaid subscribers in the recently completed 3rd quarter. That is indeed ‘major fleeing.’ Sprint, like most of the other carriers, just havent learned the lessons of other industries who also thought that the power lay with the corporation not the consumer. Think the airlines, for instance, many of whom have suffered as customers said “pah!” to the accumulated and unused frequent flier miles in their accounts and went to JetBlue or Southwest for their friendlier service.

So, Gary, we wish you farewell. And to Sprint we say, wake up and hear the ring tone. Finally get your act together and recognize that you are in the service industry. In other words treat your customers as people you don’t want to lose. Oh, and try and find a way to reduce your staff turnover in your stores. Hmm, wonder if those things are connected?

Three interesting stories that caught my eye in the last few days:

1. From today’s Los Angeles Times - now that Neilsen is for the first time ever measuring ratings not just of TV that people watch when it is broadcast but also the shows that people “time shift” - er, that means use a Digital Video Recorder to record - shows that might otherwise have been a ratings flop and be taken off the screens, might get some good scores because people are watching them later. So it’s like a stay of execution! Cool.

2. From today’s Ad Age - Rio De Janeiro has decided to ban outdoor advertising, as other big Brazilian city Sao Paulo has done, as a way to reduce “visual pollution.” Other cities around the world have taken similar steps and Ad Age asks if this may be the shape of things to come. I sort of hope so.

3. From every media source everywhere last week - Mark Zuckerberg, CEO of Facebook.com, is thinking of selling 5% of the social networking website he founded for a price that would value the whole thing at about $10 billion. And Zuckerberg is still in his early 20’s. Wow, he’s my hero: not just for creating a great website that people have been drawn to in their millions, but for not selling to Yahoo! last year for a measly billion dollars.

What do all of these stories have in common, I hear you ask?

Well, clearly the shift from old intrusive media formats to new ones that rely on consumers coming to them and not the other way around, contniues. Old media - like big billboards that shout a simplistic mesage in big letters - are a dying breed. Consumers have the controls and are consuming content when they want it, not when it’s fed to them. DVR’s alow them to watch the TV shows they like when they’re good a ready, not when the broadcasters tell them too. Facebook understands the value of loyal consumers that want to hang out with their friends online.

For people who don’t see one another that often and hate the formality of occasional emails or phone calls, Facebook is a fun and effective ways to stay in touch. For marketers and content creators - for they are one - to succeed they need to recognize thhe shift in power from corporation to consumer and come up with the goods that people want. Sounds obvious, but there’s a whole lot of feet-dragging going on.

Dell is a dying brand. It has lost the point of difference that made it a success story and is now running on fumes. If you don’t believe me, go through the steps of buying (or almost buying) a computer from them, as I did yesterday.

I’m a Mac user but need to buy a PC to run a certain software program. I looked up online what Dell had to offer but quickly found their site is not Mac friendly and freezes when you try to get product details. As a computer manufacturer, this doesn’t set very high expectations of their products.

But I didn’t give up there. I called their sales people and told them I was interested in a cheap, basic laptop and gave them the model number I wanted to know more about. The sales rep was over-friendly and asked me a bunch of questions that seemed irrelevent and intrusive (home address, phone number and email address). She said the basic package I saw on their website would’t do it. I should upgrade processor speed and memory. Oh, and I need to get their 3-year warranty because, while “our computers are built to last forever” you never can tell. This stuff I was told I needed added another $300 to the price.

I said I wasn’t ready to make a purchase and was asked why. I said the price. She asked what the problem with it was. I said how big it was. She said oh. I said goodbye and was left with the impression of a company in desperate need of an overhaul. Here’s how:
1. Don’t pretend Mac users don’t exist. Woo them and try and convert them.
2. Enough of the complicated phone options and poor voice recognition. You don’t have any stores (although you’re about to become like every other computer manufactuer by starting to sell in Wal-Mart) so make the direct to customer experience amazing.
3. Don’t try and get me to upgrade before I’ve even decided I’m interested. In fact don’t get me to upgrade at all. If the package you’re touting on your website isn’t good enough, don’t feature it.
4. Don’t ask me for lots of personal details. We’re not even dating yet, so stop stalking me.
5. Don’t ask stupid questions about why I’m not completing an order today when it’s damned obvious. Makes you look desperate and dumb.

I’d love to get my hands on Dell to make it stand out once again as a great brave brand, not what it’s become. You can almost taste the failure. Consumers sense that and will leave (are leaving) in their droves. To buy a Mac, for instance.

Now if only I could that software to work on my trusty, sexy Mac…