Category Archives: Huh?

May 20, 2015 · 11:49 am

One Thing You Can Do Right Now For Your Customers

Attention business people! We have a problem. OK, many of us have more than one, but the one to which I refer is pretty important so listen up. In short, our customers don’t trust us. Think I’m kidding?

The latest Pew study is out and as the release about it said:

In the almost two years that have passed since the initial Snowden (former National Security Agency contractor Edward Snowden) revelations, the public has been awash in news stories detailing security breaches at major retailers, health insurance companies and financial institutions. These events and the doubts they have inspired have contributed to a cloud of personal “data insecurity” that now looms over many Americans’ daily decisions and activities. Many find these developments deeply troubling and want limits put in place, while some do not feel these issues affect them personally.

Some may not feel that but the vast majority do. Most folks believe it is important that they be able to maintain privacy and confidentiality in commonplace activities of their lives. Most strikingly, these views are especially pronounced when it comes to knowing what information about them is being collected and who is doing the collecting.  Compare that belief with the data:

  • 76% of adults say they are “not too confident” or “not at all confident” that records of their activity maintained by the online advertisers who place ads on the websites they visit will remain private and secure.
  • 69% of adults say they are not confident that records of their activity maintained by the social media sites they use will remain private and secure.
  • 66% of adults say they are not confident that records of their activity maintained by search engine providers will remain private and secure.
  • 66% say they are not confident that records of their activity collected by the online video sites they use will remain private and secure.

So what can you do right now to help?  Be transparent about what you’re collecting and why.  Don’t bury that information in your Terms of Service.  Explain who has access to the data, how it is shared (or not) with business partners, how long it’s retained, and offer to present the user with a copy of everything you have.  Most importantly, to the extent you can, allow the customers to opt-in and explain why that’s a good thing for them.  Turns out it just might be a good thing for your business too.

Do you do business with people you don’t trust?  Why should your customers?

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May 8, 2015 · 10:03 am

Coffee, Burned

Foodie Friday has come around again and this week it brings us coffee. The folks at Keurig manufacture coffee makers and the pods that hold the coffee itself. They had an earnings call the other day and it brought out some very valuable lessons for all of us. Keurig’s financial results were not good and their stock has been hammered subsequent to the announcement. That’s not so instructive but the reasons why certainly are.

You might have one of these machines. If you do, you’re aware that the pods are both very expensive and not particularly earth-friendly. As what I consider to be a consumer-friendly nod to that, Keurig also makes a little reusable pod that you can fill with your favorite coffee. It’s less expensive, I find it makes better coffee, and the coffee grounds are the only trash. Of course if you want to go the single use pod route, there are lots of sources for them other than the “official” Keurig partners.

Keurig introduced its new flagship machine recently and there were some changes. First, the machine would only accept “official” Keurig pods – sort of Coffee Rights Management. The interwebs quickly figured out how to bypass this but the fact that it was deployed at all demonstrated Keurig’s thinking. Next, the reusable pod doesn’t fit in the new machine nor has Keurig made one. You MUST buy disposable pods.

Why would Keurig do this? Simple – the profit margin on the pods is huge. The results? Sales of coffee machines and accessories are down 23% in the last year and Keurig was forced to lower its 2015 sales forecast. Oops.

Of course, it’s not Keurig’s fault, at least not in their minds. “Some of this was due to consumer confusion around pod compatibility.” That’s the CEO on the earnings call.  OK, we’re dumb, but at least you admit you were too:

…we took the My K-cup away and quite honestly we’re wrong. We missed, we didn’t – we underestimated, it’s the easiest way to say, we underestimated the passion that consumer had for this. And when we did it, and we realized it, we’re bringing it back because it was we missed it.

The lessons are pretty apparent.  Don’t build your business around a plan that conflicts with your customers.  If they like a product, make it better or less expensive, or both.  Don’t take it away because you think it might improve your profits.  When something you’ve done isn’t accepted or working the way you planned, alluding to “consumer confusion” without admitting you caused it is narcissistic.  Frankly, for many people I know their morning K-Cup is not consumed with a desire for great coffee – it’s fast, it’s convenient, and they get over their guilt about polluting by the time they race out the door.  Getting those people angry by taking away choice in what they put into the machine isn’t growing the business – quite the opposite.

No business can overcome crappy product reviews (the new machine failed miserably) and consumer resentment over less choice.  Keurig’s results demonstrate that very well.  Any questions?

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May 4, 2015 · 11:35 am

Misleading Marketing

Sometimes it’s just too easy to point out corporate stupidity and today I’m taking that easy road. You might be aware that the FTC is suing AT&T for allegedly misleading consumers by offering them “unlimited” data plans, and cutting back their data speed when they exceeded a maximum monthly allotment of data usage. AT&T doesn’t deny doing it, which is smart since there is ample evidence to support the accusation. Nope. Instead, they’ve told the FTC that their hands are clean since customers should have known they were going to be throttled if they used too much data.

I’m not all that knowledgable about network congestion management.  I do know that all ISPs (and a wireless carrier is one of those although you might not think of them that way) use “traffic shaping” to manage the load on their system.  Generally that’s something that’s imposed on a short-term basis to manage load.  So while there may be a heavy demand for bandwidth during primetime evening hours, traffic is much lighter in the middle of the night, for example.  Wireless carriers (except for Sprint) all impose limits on the bandwidth a user can have.  In my mind it’s a false scarcity since most people don’t come close to using all the bandwidth in their plans.  Even with the explosion of mobile video usage, no one is claiming that our wireless infrastructure is near its limit.  But let’s put aside the alleged technical issue and focus on the real point.

You can’t sell something as “unlimited” and then place limits on it.  Selling someone an unlimited high-speed data plan which becomes very low-speed after a certain, unstated point is misleading at best and fraudulent at worst.  The  fact that customers continue to renew their contracts isn’t an indicator that they don’t mind being deceived; it’s more of an indication about how little choice we all have.

This quote, taken from a MediaPost article on the subject is what I find particularly galling:

AT&T adds that consumers with unlimited data plans signed up for those contracts even though they “had reason to anticipate the possibility” that they would be throttled.

I don’t know how someone at AT&T wrote that with a straight face.  Really?  When you said “unlimited” a customer with zero technical training about network management should have anticipated that once they crossed some boundary known only to you they would suffer a service degradation?

Any of us in business need to run our businesses in accordance with the business model we develop to maintain profitability. If AT&T’s engineers tell them that throttling is necessary, so be it.  The point is that we need to let our customers know what they’re buying – honestly, transparently, and actively.  Lying isn’t a marketing plan – it’s just stupid.  Right?

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