Verizon wireless – why don’t you want my money?

I had a visit to marketing’s Theatre of the Absurd yesterday.  Although Verizon Wireless’s slogan is "we never stop working for you," apparently that does not include me.

Now that things are all good between RIM and NTP, I’m ready to make a switch from my Treo 650.  Although my "new every two" $100 credit comes up in July, I was ready to pay for a new handset now without the credit and re-sign for another two years.

After being bounced around three customer service operators, I was given an 800 number for the "early upgrade department."  In VZW terminology, this is the "continuity marketing" department.  I was told that, despite the fact that I was ready to pay $300 for a new handset and sign up for another two years (adding 18 months to my current contract), I could not do so.

me:  "do you realize I am trying to pay you $300 now and extend my contract for 18 months?"
VZW rep:  "yes, but I’m sorry, you are not allowed to upgrade at this time."

This went back and forth for a while, until the "continuity marketing" supervisor made it clear that "she was not authorized" to do anything about this and her department handles "mailing out postcards and flyers."  So…I’d need to call customer service.  I called customer service and they said…"there’s nothing you can do."

me:  "don’t you see I’m trying to buy something from you and you will not let me?  how is that good for your business?"
VZW rep:  "yes, I can see that but we cannot help you at this time.  I recommend you buy the handset you want from eBay and call us back to activate it."

These interactions were actually not frustrating to me, but rather amazing, as Verizon Wireless is clearly unable to serve their customers because of the roadblocks established by their own processes.  I’m currently working on research regarding the future of the marketing organization and this was a clear example of how today’s marketing is broken.

So if you’ve read this far and are a Verizon customer, here are three things you should know that aren’t readily apparent to the public and might help:

  • The Consumerist has an entire Verizon thread
  • VZW has a "three strikes" policy:  if you have three issues with your phone, you are eligible for an early upgrade at steep discount to a new model.
  • VZW has a three year calling plan:  if you are willing to lock in for this long, you will get bonus minutes, among other things.

As for me – if I can wait until July, I might as well hold out until October and switch to Cingular or T-Mobile!

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“Poor man’s first class” gets legit

This isn’t surprising – in consulting, we always referred to the exit rows as "poor man’s first class."  So now that Northwest is charging for the seats, the phrase is justified.  This obviously has potential to get quite out of hand – as Jackie Huba states, "…but really, what’s next? Inserting quarters to keep the overhead light on?" 

The management consultants are hard at work again at the legacy carriers, first removing blankets and pillows to speed boarding and free up space – then introducing fees for crappy headsets and 7-11 quality snacks – moving into "zone boarding" that’s thwarted by all of the frequent flyers who get on early anyway – disallowing families with infants to pre-board – and eliminating stand-bys.

Why can’t airlines try to improve profitability by improving customer experience?  Rather than taking things away, figure out how to make things better!  Last time I flew somewhere (Delta, ATL/BOS) – I was definitely an optimized revenue mile…as a thin profit margin hurtling through the atmosphere in a metal tube.  Contrast that with JetBlue, where I’ve almost always had a great experience – even when a flight was delayed for mechanical for 3 hours.  B6 makes it worth your while.  And they always smile.

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When did Google become a sieve?

Does anyone else wonder why secret stuff at Google has been leaking so much recently? 

First it was GDrive.  Then it was the 2006 financial target.  Then Google Calendar or CL2.

Inadvertent?  A result of hyper-growth and lack of controls?  Or for all you conspiracy theorists out there, a strategy to communicate bad news without having to communicate the bad news?  Alternately, is it a strategy to communicate alpha products to keep brand and stock momentum going?  Like the new beta releases that seem to last forever, this goes in the opposite direction – and techies are biting hard on every bone that GOOG throws their way.

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You decide: 1 Berkshire Hathaway or 231 Google?

If you had to guess, what percentage of investors in Google right now are "smart money" (vs. dumb money)?  I’m intrigued by corporate statements that seem to be driving recent changes in GOOG share price:

This isn’t guidance – no EPS estimates or financial results from product lines – just talk.  Do you think smart investors heard these statements and went back to their valuation models, coming up with new targets and changing their positions?

Probably not.

What struck me was a side link on the SJC Mercury News article – a pdf of the Google "owners manual."  Clearly modeled after the Berkshire Hathaway owners manual.  But the differences between the two – diversification of BRK vs GOOG in particular – are night and day.  Their websites are both simple, yet on opposite again:  brochureware vs. one of the most powerful tools in the universe.

If you had to decide, which would you choose:  1 share of Berkshire Hathaway Class A stock or 231 shares of Google?

Disclosure:  I do not own any BRKA or hold a direct position in Google.  Don’t consider anything you read here as financial advice – even if you have some dumb money burning a hole in your pocket.  This post is provided for informational purposes only and does not constitute
an offer to sell or a solicitation to buy any security or other
financial instrument.

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monopoly – delivered

Source:  Wikipedia

Well, this game of RBOC monopoly started on January 1, 1984 and now at&t is only two (giant) steps away from reclaiming the entire board.  But the game has changed – technology has changed the  board from analog to digital.

Great article at Wikipedia for a trip down memory lane with the carrier you grew up with (more or less – both Southern Bell and South Central Bell are missing).  As for the carrier that the next generation grows up with…maybe the death star will survive, but the right answer maybe none of the above.

Although the term "monopoly" carries a negative connotation today, it’s clear that the economic natural monopolies evident in network industries are not mutually exclusive of a Laissez-faire market structure.

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Starbucks and one-way brand expansion

Thinking about Starbucks recently – reminds me of a theory I have on how brand extensions can work.  It’s much easier for a premium brand to extend "downscale" and retain its core/prestige than it is for a mass market brand to reposition itself as upscale.

I recalled this after reading a couple of interesting mentions about Starbucks.  The first was a post on Laura Ries’s "Origin of Brands" blog, discussing the SBUX distribution of Laurie Berkner DVDs.  The other was a news article about increased presence in New England and Northeastern grocery stores.  Reminded me of their kiosks popping up in airports and highway rest areas.  Taking a quick look at their FY05 10-K, 85% of revenue was derived from company-operated retail, the core of the brand.  These business model extensions appear to be successful as the company reports consistent margin and ROE growth since 2002.

It seems pretty clear that Starbucks should be a brand to emulate when considering business model expansion; they continue to grow their "core of coolness" (own stores) while monetizing the brand through licensing and alternate retail outlets.  So why isn’t anyone crying "foul" or "sell out?"  Because the moves make sense and allow them to successfully retain their premium brand while enjoying mass market distribution.

Brands RARELY succeed trying to claw their way upscale.  More on that some other time.

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Helio + MySpace: more light than heat

I thought this was an interesting announcement, coming so close on the heels of Mobile ESPN‘s launch the day after the Super Bowl.  There’s been a flurry of press but I’m not seeing a lot of analysis, even from some names like Om Malik…maybe people are holding their breath until the service actually launches.

Going after new customers with these types of co-branded services makes sense.  For existing customers, the switching costs would be steep – especially if you’ve already invested in equipment and accessories along with a long-term service contract.  So the experience needs to be pretty enticing, right?

On the same day as the Helio/MySpace partnership announcement, the Wall Street Journal published a review of Mobile ESPN.  Some interesting facts:  IM and email are disabled; access to some sites is blocked, e.g. the competition; and the service can cost up to $224.99 a month[!].

Don’t get me wrong – the Hero and Kickflip are pretty cool looking phones.  But it looks like Helio will fall short of the level of integration that Mobile ESPN has with Sanyo.  There were no quotes from MySpace in the press release – don’t both parties usually want air time in partnerships like this?  I think we’ll see that this is a temporary exclusive and the portal will expand to other carriers and devices.  No way News Corp will limit MySpace’s over 50 million users to one type of device – the community would inevitably force expansion once users get turned on and demand a mobile interface.

Airport security programs need to understand the customer

A couple of weeks ago, I was down in Orlando for the WOMMA conference.  Great event, met lots of interesting people.

Near my gate, I noticed a kiosk designed a lot like Amex Blue.  It was setup for Clear, a service that intends to expedite travelers through airport security.  It’s only operating in Orlando, but expanding to IND and SJC soon.  According to the Globe, Boston’s Logan Airport will implement a similar program this summer.

So here’s the deal – you pay $79.95/year and submit biometric and other info to the TSA so they can monitor you.  Currently in MCO, there isn’t a separate Clear line, so you wait with everyone else, in addition to the iris and fingerprint scans.  Clear only exempts you from "additional" security screening.

I think it’s a cool idea, but right now there aren’t any tangible benefits for the costs.  Sounds like Logan’s thinking in the right direction by putting together "premium" benefit packages – but they better be enough to overcome privacy concerns as well.  Partner with the airlines to expedite check-in.  Give me a guarantee of less than 10 minutes to clear security, even at 7 am on Monday morning.  Unless Clear offers real value, it’s going bankrupt.

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