Yesterday morning I spent 27 minutes and 23 seconds speaking with Eric, a customer service representative from Canadian telecom giant Rogers Communications.
It felt something like the photo shown below, except I use a cell phone and not a landline.
Okay, not exactly like the photo, mostly because there was no screaming involved on either side of the conversation: Eric was very professional, and I simply don't believe in ever yelling at front-line workers who are just trying to do their jobs as their employers have instructed. I don't blame Eric for the outcome of our chat, but I do have a few choice words for Rogers.
You see, I've been a Rogers customer for several years, and I've been getting a "loyalty customer" bill credit on my home internet for the past 12 months.
Except, it's set to expire next week... so I was calling to see how that credit could continue.
Because if it doesn't, my monthly internet bill will increase by a whopping 44%.
I earn my income working from home these days, and I have four children about to start online school again... so it's not like I can go without internet service.
But a 44% increase "just because"? That's frustrating, to put it mildly.
Unfortunately for me, my conversation with Eric did not go as I hoped it would.
In the past, I've been fairly successful at negotiating relatively fair prices* for my telecom services. But this year, it took me less than half an hour to realize there wasn't anything Eric was willing to do for me.
He presented me with worse offers than were available on the website (which, if I thought were acceptable, wouldn't have required me to spend 30 minutes on the phone trying to do better) and then essentially told me I could either accept the fact I was about to pay significantly more for exactly what I was getting today or I could cancel my service... and he'd be happy to hold the door for me so it didn't hit me in the gluteus maximum on my way out.
As such, I'll need to spend some time this week looking for better Internet pricing, although I'm not optimistic I'm going to be successful. After all, we're mostly restricted to our homes because of COVID, and that's made the internet as essential to us as electricity or water. So if you were a telecom provider in an oligopolistic market like Canada, would you be offering any great deals on internet services right now? Exactly.
Still, what follows are three anecdotes from my conversation with Eric that I hope can serve as valuable lessons for every customer-focused company...
... or at least any company not artificially sheltered from real competition that might prevent them from taking advantage of their customers at every possible opportunity.
1. LISTEN TO YOUR CUSTOMERS
Eric was trying to sell me on a "SmartStream" package. What's SmartStream? It's a device that "integrates popular streaming apps like Netflix, Amazon Prime Video, hayu, YouTube, Sportsnet NOW and more, with voice search* – so you can easily find what you’re looking for."
In other words, it's exactly like the Amazon FireStick I use with all my TVs.
The big difference? I bought my latest Amazon Firestick 4K for $35... and SmartStream is $60/year just to rent. (Sidenote: subscription businesses are very good businesses.)
After I very politely told Eric I had no use for SmartStream (and explained why) he should have not mentioned this "great offer" again. But he did.
I wish I was kidding.
Companies have their own sales objectives and goals, so I don't blame Eric for trying to sell me on SmartStream. But when I specifically told him I knew what it was and had no use for it?
He should have dropped the sales script and moved on.
He didn't, though, and I became more frustrated every time he mentioned it because it showed he wasn't listening to me.
Listen to your customers.
2. KNOW YOUR AUDIENCE
During our conversation, I calmly said, "Eric, try to understand how I'm seeing this situation: next month I'm not going to get any better service or anything more than what I'm getting today... but my cost is basically going to double. How should I feel about that?"
Eric then attempted to use a grocery store analogy to justify the massive increase. He said, "Well, everything costs more. It's like when I go to the grocery store. Last month, I got apples for one price, and this month, they cost almost double..."
I didn't let him finish, though, because it was a terribly flawed analogy. I knew this because I have two business degrees, understand the concept of inflation, and know that Canadian inflation isn't anywhere close to 50%. In fact, according to the Bank of Canada, "The average inflation rate of goods in 2021 has been 4.4 percent—much higher than that of services, which has been 2.1 percent. In the 20 years before the pandemic, goods inflation averaged only 1.4 percent." In other words, Eric, apples may indeed cost you more these days... but they're not twice the price that they were last year. Not even at Whole Foods.
As a fair and reasonable person, I'd actually accept my cost going up 4.4% due to inflation. But Eric was neglecting a decimal: my cost is going to go up 44%! And I told him as much.
Is "biz-splaining" a thing? Perhaps it should be. Eric couldn't have possibly known that I have a business education and a better understanding of business fundamentals than the average person... but he also shouldn't have been using overly-simplistic, flawed analogies to try and justify absurd price hikes before being absolutely certain of his audience.
Put another way, it's generally a bad idea to assume your customer is an idiot.
3. CUSTOMERS DON'T CARE ABOUT YOUR COSTS
When I asked Eric why several smaller, lesser-known telcos (who purchase their bandwidth from Bell and Rogers) were able to offer the same service at better deals, Eric said, "Well, we have a lot of costs that they don't have... like our stores that offer convenient service."
I couldn't help myself from laughing out loud.
"Eric," I said, still laughing, "I do everything possible to avoid stepping into your stores... and you want me to pay more because you have them?"
Customers don't care about your costs. Or your inefficiencies. Or even your shareholder needs. They care about getting what they need and want at a price they determine to be fair.
That's not to say all customers want the same thing or are willing to pay the same amount: they don't and they aren't. Some will happily pay more extra service, or a prestige brand, or the latest gadget. Some want the very best price, without any bells and whistles. Many fall somewhere in between: customer needs vary.
But except in a few instances where someone has expressed a desire to support local businesses or charities, I've yet to meet someone who willingly pays more for goods and services just because the business has made decisions (like maintaining a network of retail locations, for instance) that have resulted in higher costs for the business. Have you?
SOME FINAL THOUGHTS ON LOYALTY...
Towards the end of my call, I asked Eric a direct question: "What do I need to do to cancel?"
This wasn't a negotiating tactic, and it wasn't the beginning of an instruction. I simply needed to understand how the cancellation process worked (including how long it would take) so I had that information available should I find a better deal with another provider later this week.
But Eric's response surprised me.
He said, "Well, I'm in the loyalty department, so I can do it right now for you."
I haven't ever run a loyalty department, but "Customer Loyalty and Retention" is a full-class module in the MBA course I teach on Retail Marketing Strategies, so I've read a lot on the subject and know enough about how it's supposed to work to have an informed opinion.
And because of that, I don't think I'm being absurd to suggest a key objective for most "loyalty departments" would be to... drumroll, please... foster customer loyalty.
Or, at the very least, not to usher customers out the door.
"But David," you might be thinking, "what did you expect Rogers to do? Just give up and give you everything you want? How would that make sense for their business?"
Actually, I didn't even expect them to give me the same price as they gave me last year. Inflation might not be 44%, but it is a challenge. And those shareholders do need to be paid.
No, I didn't expect Rogers to give me everything I wanted. I simply expected a far more gradual price increase.
Like what happened in 2021. You see, in 2020 I was getting a $50 monthly credit on my Rogers home internet services. But when I called in January 2021 to try and negotiate the same deal, the representative (in a "take it or leave it" fashion) only offered me $40.
"Better than nothing," I thought. And that's where it ended.
So this year when I called, I thought Rogers might try to "only" offer me a $30 monthly credit. Had they done that, I certainly wouldn't have been delighted about the $120 annual increase.
But it would have been better than the "nothing" I was offered this year.
And I almost certainly wouldn't have taken any time out of my day to write an unflattering 1,855-word review of Rogers that will live on the internet forever for all future internet service seekers to discover and consider.
It's perfectly okay for businesses to make money, and it's okay for them to increase their prices to do so. But there's a right way to do it. And suddenly hiking a bill by 44% isn't it.
To be fair, Rogers doesn't really need to foster any loyalty today. Consumers don't really have a choice, and Rogers knows this. So why bother?
Because... it's inevitable that one glorious day the Canadian government will finally allow some actual competition within the Canadian telecom sector.
And on that day, when the well-funded AT&Ts, Verizons, and Googles of the world are allowed to provide internet services under the same favourable terms as our Canadian incumbents, they might choose to enter our market ready to compete.
Then, Canadian consumers who have been abused for years by the big telcos will defect en masse to these better-value alternatives... and they'll be much, much better off as a result.
And Rogers? Maybe on that day, Rogers will finally understand why it's important to foster customer loyalty before you actually need it.
* Note that I need to use the phrase "relatively fair prices" because, as per the chart below, Canadian telecom operators enjoy the highest total revenue per gigabyte in the world...
This is fantastic news if you own shares in a Canadian telecom company and terrible news if you're a Canadian who relies on said companies to provide essential Internet services.