The Beginning of the End at AT&T

May 24, 2010

In an incredible announcement, AT&T declared that it will be raising its termination fee for iPhones and a few other devices from $175 to $325.  The company offers some explanatory chatter about handset subsidies, but the real message it’s sending is that it’s simply done trying to win over customers.  Rather than keeping us the old fashioned way, by creating and sustaining real value, AT&T is now just charging us a ransom to leave.  Imagine an AT&T that was truly confident in its ability to serve? How would it behave in the marketplace?  It would invite customers to stay only as long as we’re satisfied — and not a cell-phone minute longer.

I find this decision scandalous, particularly since I’m already a frustrated AT&T customer (I can barely make it through a phone call without it being dropped).  When a company moves towards trapping customers, the clock starts ticking on its ability to serve them.  Penalties for ending the relationship create sharp antagonism with customers — antagonism that’s disproportionately felt by front-line workers — and signals to the entire organization to forget about excellence.

This toxic combination ensures mediocrity and accelerates a company’s decline.  I get it.  Winning the cell phone game is hard, and the people behind the idea likely had the best interests of the company in mind.  But when you broadcast that you can’t convince customers to voluntarily stick around, everyone hears you loud and clear, including your employees.  Who would keep trying in a culture like this?

Sigh.  This is a sad day for AT&T.


Self-Service Innovation at USAA

August 13, 2009

The NYT recently described an innovative new iPhone “app” that allows customers to use their phones to deposit a check.  Take pictures of the front and back of the check with the phone’s camera, and then use its email function to send the pictures to USAA.  Now discard the check.  No trip to the bank necessary. 

The application is a great model for self-service innovation.  USAA customers get a solution they prefer to the existing alternatives.  Instead of going to an ATM, they can now deposit a check from anywhere.  Customers get the enhanced convenience of mobile banking without having to sacrifice functionality.  In fact, the mobile deposit service increased the functionality of the traditional online banking experience, essentially overcoming the classic tradeoff between functionality and convenience.

USAA didn’t just transport the same services to a new channel — it designed new services for a new channel.  Bank of America, in contrast, created an iPhone application that only performs a limited set of transactions, all of which can be performed through its online banking program.  This type of solution is far more common and creates far less value for customers, a concession to the tradeoff between convenience and service.  USAA reminds us that great service innovation occurs when we challenge our employees (and often customers) to overcome persistent assumptions.


iPhoning It In

April 16, 2009

Personal Digital Assistants. Do they still call them that? It sounds like a euphemism for Mommy’s Little Helper, which may be closer to the truth.

My father was a military man, not by choice, but he rose to the occasion. The letters PDA stir memories of stories about the rules against Public Displays of Affection on the West Point campus in the late 1960s. The Army still hasn’t figured out how to police our soldiers’ sexuality, but that’s for another post.

Dad gave me a running start in associating my Blackberry with giving up a certain degree of personal freedom, but even I never paused to consider the true price of obsessively using these incredible tools. And I dismissed anyone who whined about having to “always be available” as not one of us, a member of the productive class.

Then I was deeply provoked by the following paragraph in the NYT’s interview with John Donahoe, the CEO of eBay since 2008:

…I try to only do e-mail first thing in the morning or in the evening, because I find if I check e-mail during the day, I go from being proactive about what I want to get accomplished that day to being reactive, and that’s a bit of a trap. Being reactive is a lot easier than being proactive, and e-mail and the BlackBerry are natural tools to facilitate that.

It’s that “easier” word that got me. My life is easier, but rarely better when I’m strapped to this little machine. In any given moment, quite literally, I can avoid the discomfort of having to focus my thoughts and actions. Instead of determining my destiny, I can let my brain fill up with someone else’s issues or LinkedIn request or cure for erectile dysfunction. Instead of seizing the day, I can submit to being seized.

Yes, John, easier is the word. It doesn’t sound like a big deal until I think of the aggregate number of times that I’ve checked for new messages in the last five years.