I read an article yesterday in Crain’s Chicago Business entitled “America’s Ever-Shrinking Middle Market” where the author Joe Cahill explains that large companies and long-standing brands like McDonald’s, Sears and J.C. Penney are struggling as “ . . . nimbler new competitors are picking off customers.” This is where my story begins . . .
I was opening my bills the other night when I noticed that my cable bill had risen to a whopping $250 a month. This was up from about $170 per month only six months ago . . . . Now, some of you may say – no big deal BUT my family watches very little TV and of the 500 channels we have, we tune in to less than 10. Now, to be fair that price includes a telephone land line (which we also do not use but maintain for emergencies) and wireless internet. So I decided to call abC / Xyz to discuss how we had gotten to where we are and to “negotiate” a package that would be of value to me and more in line with my needs.
Now I bet you are dying to know the result of that conversation. It is actually a case study for “how NOT to treat a customer” but to be honest, I was not surprised. By the way, abC changed their name to Xyz in 2010 to dodge the poor customer service reputation they had amassed over the years – let me tell you, it has not changed. I started with the billing department who told me that the increase was due to the expiration of a promotional rate – I guess $170 per month was considered a promotional rate (how scary is that?). Then I was informed that my price was based on the way abC / Xyz had “bundled” my services. WOA! RED FLAG! “Bundled Services” was not what I wanted to hear (Sourcing 101 here!). So I asked the billing rep to explain to me exactly what was included in the bundle. After listening, I went through each line item and let him know what I did not need, what was of no value to me and what I did not want to pay for. His response was (I am paraphrasing) “that’s nice but we don’t sell our product that way. You need to buy what and how we want to sell”. As I started to question what the difference would be if I was new customer, he told me that I would need to talk to sales and then he transferred me there. STRIKE ONE. Next I talked to a woman in sales who told me that she could NOT talk to me about what would be offered to a new customer but could talk to me about the “customer loyalty program”. After much discussion, and over an hour of my time, the package was not changed and I ended up with $20 off my monthly bill. STRIKE TWO. To make a long story short, I will be considering other options AND there are numerous options – moving to the more nimble carrier that has recently moved into my neighborhood, cancel cable and consider a web-based solution for programming, etc.
As a supplier, abC / Xyz gets a big zero from me. They are one of those brands that is huge –and getting bigger every day as they have just today announced that they will be buying Time Warner. The article in Crain’s, noted above, points out that even the biggest players in their industry are not insulated from the competition. Those companies that focus on value as defined by the customer are the ones that in the end will win. What is most interesting about abC / Xyz is that the content they sell can easily be disaggregated and sold exactly the way the customer wants to buy it – that is what Netflix is doing so it can be done. What is most fascinating to watch is how rapidly major industries are changing and it will be interesting to see which companies survive, which companies flourish and which companies become extinct. As Sourcing and Supply Chain professionals we can play a key role in helping to define new methods and relationships that support that customer / value focus. While it is an interesting time for business in general, it will be even more interesting for those that support these businesses.
Join in the conversation and let us know what you think . . . . .