Category Corporate Idiocy

Beautiful Plumage, These Apple Batteries

Dramatis Personae: TINO, NICOLE, and a GENIUS.

An Apple Store. TINO and NICOLE approach the GENIUS, behind some kind of bar. TINO is carrying a laptop computer in one hand and a battery for same in the other. The GENIUS is — I am not kidding — wearing a neckbeard and a black fedora that’s a little too small for him.

TINO: Hello, my good man, this battery is defective: look how it’s bulging!

GENIUS: Hmm.

GENIUS looks at the battery and then starts typing away, entering the computer’s serial number into another, functional computer.

GENIUS: Ah, here’s your problem, there. This battery, it’s out of warranty. It’s over a year old. You’ll need to buy a new one.

TINO: When was it sold?

GENIUS: Yeah, well, it was sold in November of 2008, that was. The warranty on the computer is for three years, but the warranty on the battery is only for a year. It’s pining for the fjords. It’s nineteen months old. Now, if you’d bought AppleCare…

TINO: I don’t buy AppleCare because extended warranties are a sucker bet, and I buy a new computer every three years anyway. And this battery isn’t worn out from use; it has failed because of a manufacturing defect. It won’t even fit in the computer because it’s so bulgy.

GENIUS: It’s designed to do that!

TINO: It’s not designed to fail.

GENIUS: No, it’s designed to bulge like that to prevent a fire! Beautiful plumage!

TINO: Be that as it may, it’s nevertheless an ex-battery, and it’s an ex-battery because of a manufacturing defect.

GENIUS: You must have overcharged it!

TINO: I don’t think so, and in any case part of the reason the thing costs $129 is because of all the fancy circuitry in it to prevent overcharging, premature battery failure, and the ignition of fires. If it’s been overcharged, that’s still because the battery is defective.

GENIUS: It’s just resting!

TINO: It’s not bleeding resting!

TINO leaves, because he fears that if he doesn’t, his next action will be to leap across the genius bar and beat GENIUS around the head and neck with an iPad.

TINO sits on a bench in the mall and reads RSS feeds.

Something happens inside the store. Five minutes pass. NICOLE comes out of the Apple Store carrying her laptop bag, saying that they replaced the battery under warranty.

Curtain.

In short, Apple replaced the battery under warranty. They did not specifically need to do this; since batteries are wearing parts, they’re only warranted for a year. But there’s a big difference between a battery that’s failed because of use, and a battery that’s failed because of a defect. Apple has had a lot of problems with defective batteries.

In this case, there was a way for the GENIUS to replace the battery on Apple’s dime. Possibly an unpublicized extended warranty on these batteries, because they’re known for high rates of failure.

But he didn’t do that right away. Things could have gone like this:

TINO: Here’s a failed battery, my good man!

GENIUS: You know, this thing is technically out of warranty, but I’m going to replace it anyway, because it’s defective and because Apple isn’t about trying to nickel-and-dime you to death!

TINO: Bully! Apple always has your back! Quality and Service, that’s the thing!

Note that the end result of this — us getting a battery — would have been exactly the same. But the way things actually unfolded, Apple spent the money replacing that battery while making us feel like they were our adversaries. Had the guy replaced the battery without first telling us to buy a new one, and without first telling us that this was our fault, he could have made us see Apple as an ally. Instead, this guy’s approach resulted in the situation being one of Tino & Nicole vs. Apple and their dodgy OEMs.

Two Confusing Things About Publishing

From a recent, much-linked New Yorker article on the e-book business:

Good publishers find and cultivate writers, some of whom do not initially have much commercial promise. They also give advances on royalties, without which most writers of nonfiction could not afford to research new books. The industry produces more than a hundred thousand books a year, seventy per cent of which will not earn back the money that their authors have been advanced; aside from returns, royalty advances are by far publishers’ biggest expense. Although critics argue that traditional book publishing takes too much money from authors, in reality the profits earned by the relatively small percentage of authors whose books make money essentially go to subsidizing less commercially successful writers. The system is inefficient, but it supports a class of professional writers, which might not otherwise exist.
  1. There are not many businesses where you can be wrong 70% of the time and stay in business.

  2. Returns — the publishers’ biggest expense are entirely eliminated by e-books. That must be why they insist that e-books should cost as much as, or more than, hardcover books.

Leading Indicators, Retail Edition

A leading indicator, as the term is usually used, is a factoid that can be used to predict other factoids down the road. The business TV people love to talk about ‘durable goods orders’, for instance, even though I don’t think this is a very good indicator. People want fewer durable goods, and therefore you can infer from that that the people who work in the durable goods factories might soon be laid off, the suppliers of durable raw materials will soon see their orders shrink, etc., etc. The lack of orders leads the other things.

I don’t think that this makes much sense any more, largely because I think that the old models of the world economy are enough out of whack with current reality; I don’t think the models adequately consider the enormous increase in the velocity of information we’ve seen over the past ten or fifteen years. It used to be that by the time the durable goods factory (for instance) cut shifts, there was already a huge supply of durable goods in the pipeline, and the slowdown in demand had in fact been going on for quite some time. Today, a well managed company is going to make much quicker changes, so you’d expect to see more, smaller corrections rather than big, disruptive ones that come too late anyway.

And when the durable-goods factory does lay people off, they’re going to be able to find new jobs much more easily somewhere else thanks to the Internet. It used to be fairly complicated to get information about things outside about a 50-mile radius from where you were standing; now, it’s extremely simple. We understand this on some intellectual level, but our models of the world — both the informal ones we use to make sense of things, and the formal ones that the people on CNBC use to attempt to predict the future — have not fully integrated that information yet.

But this isn’t what I mean. I mean, I’m interested in what you might call micro leading indicators, the signs that indicate that a company or organization has just stopped giving a damn. These aren’t necessarily customer-service failures in any meaningful sense of the word, but things that suggest a plan or style of management that could lead to serious failure if the course doesn’t change. I saw a number of these yesterday at Costco.

The camera display there:

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There are two problems here, really. The first, more subtle one, is that most of these cameras suck, and they’re almost all the same ones that have been sucking there for at least a couple months. Costco has never been a good place to buy cameras if you are particular about what you get, but it’s got worse in the past few months.

The more serious problem is that none of these cameras have any power. No batteries, no plugged-in power. The SLRs don’t even have lenses. This is a change from Costco’s previous approach. It means that Costco has spent the cost of one of each of these cameras for the purposes of a demo — but you can’t actually demo them because none of them do anything without power.

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This thing is one of those dummy models. These are hateful to begin with, and something that you used to not see at Costco. I’m somewhat willing to forgive that because it’s a clock radio, and can’t be demo’d properly anyway without careful configuration, a radio signal, and an iPod or iPhone. This is a bit better than most dummy products, though, in that it will run through some kind of demo program if you hit the snooze bar. Unfortunately, it’s unplugged, and has been unplugged on this shelf for at least two weeks. You can see the power brick there next to it. The clock radio next to it is plugged in, but if you want to demo the one that works with the iPhone — sorry, Charlie.

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They’ve gone to the trouble of plugging this TV in, but not of supplying it with a signal. This might not be such a terrible thing, since it’s a good price and since Sony hasn’t managed yet to destroy its reputation in the TV market as they have in so many others. This is a 1440×900 display, though, which is 16:10, not 16:9 as are most TVs these days. How well does this thing actually work? How does it deal with the scaling, and with the fact that TV signals are not quite the same shape as the screen? Impossible to say without buying it and taking it home.

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Sylvania beat Sony again? Yes, in merchandising incompetence at Costco. This one isn’t even plugged in, and it certainly doesn’t come with a premium brand name. Sylvania started out over 100 years ago as a company that repaired burned-out light bulbs. They don’t actually manufacture consumer electronics; the company just licenses the name, in the case of TVs to Funai.

Making sure that all of this stuff is right — and particularly ensuring that the cameras have power — does take time and effort. Costco always has the manpower to have someone uselessly checking your card when you come in the door (that guy is really there to keep you from carrying stuff out the in door; you can’t buy anything without a membership card, so requiring you to have one to come in is pointless), and another to ‘make sure you have received all the items you paid for’ when you go out the door. Preventing shrinkage is very important to their business, and they staff accordingly. Catering to the customers is at least equally important, but since this is very hard to measure it is often one of the first things to slip.

If these leading indicators are accurate, I’d expect to soon see at Costco the following continuing indicators of the same trend:

  • Safes on display locked so you can’t see the interior.
  • Computers on display password-protected so they use electricity, but don’t allow you to do anything other than admire the case.
  • More dummy electronics displays
  • More slightly out-of-date products, or less desirable versions (e.g. only unpopular colors of iPods, maybe)
  • Longer lines at the tills
  • Eventually, sharply falling sales and membership renewals

The iTunes App Store Sucks

This weekend, it was some kind of problem with my ‘credit balance’, even though I was trying to ‘purchase’ an app that was free. Now, it’s this:

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Since ‘modifying’ an item takes, oh, the blink of an eye — or maybe a couple of seconds if you have to replicate databases — I cannot understand why a multi-billion dollar company is operating an online store — with custom client software, no less — in this way.

What The Fuck

I mean: What the fuck.

Steve Jobs:

[...] during the past week I have learned that my health-related issues are more complex than I originally thought.

In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June.

While I wish Steve Jobs all the best, and I think that Apple would do fine without him. The stock, on the other hand, will not do fine without him. In the best of times, Apple trades wildly on rumors and whispers and total bullshit spouted by ‘analysts’ who don’t know their asses from so many holes in the ground. Throw in something like this — after the shares have already been depressed for some time on Jobs health uncertainty — and Apple shareholders — a group which includes Tino — are going to be screwed. Rest assured that I will be first in line for the shareholder lawsuit if it turns out that they’ve been lying to us about his health. ‘Hormone issue’ my ass.

The funny thing about shareholder lawsuits, though, is that you sue the company in question. And who is the company? The shareholders; the lawyers are the only ones who make money in that kind of situation. Really it’s the board members and management who should pay, either for lying to us or for gross negligence in not knowing that they were lying to us.

iPhone Bill Examination

Here’s my iPhone bill, all 15 pages of it. Presumably it will see serious adjustments as a result of this, but as my billing period turns on the 4th of the month, I got this one — for pro-rated charges from June 29-July 4, and then for recurring charges from July 4-August 4. On August 4 I will be billed for recurring charges for August 4-September 4, and any overages or special charges posted in July.

The total is $240.33, which I absolutely can’t figure out. There are two phones on the account, on a $100 ‘family plan’ (plus $29 for the second phone). So I should have been charged $36 for activation for the first, $26 for activation for the second, plus $129 for July, plus (($129/30) * 2) + ($129/31) * 4)) = $25.24 for two days of service in June plus four days in July (AT&T actually charges 1/30 of the monthly rate for pro-rated days). This should be $216.64. They claim $12.86 in ‘Government Fees & Taxes’, $155.99 in usage, and $71.48 in ‘Credits/Adjustments/Other Charges’. None of this makes the slightest bit of sense. I think that the total is correct, but really, decent customer service would seem to require something better than your customer saying ‘Well, I think I might not be getting ripped off here.’

Each page pops up a larger version if you click on it.

Page 1

Attbill-1

Name and address and so on. Pretty standard, except that their billing system doesn’t know that this is my first bill, and so I will not ‘notice [their] new bill format’, which they say requires less paper. Given that this bill is 15 pages long, I’d hate to have run into their old bill in a dark alley.

iPhone Number Porting Hell

Nicole and I bought two iPhones on iPhone Day, June 29. I ported my number from my old T-Mobile phone without incident. Nicole was not so lucky.

Iphone Sim Card

She wasn’t really trying to port a number at all; her old phone was with AT&T, and she just wanted to keep the same number while moving the whole business to our iPhone family account.

When she initially set up the phone in iTunes, it told her that there was a problem in transferring her number, and that she’d have to contact AT&T customer service; the phone was assigned a new number.

She contacted AT&T customer service using their online support system, which amounts to IRC with a terrible Java client. You’re stuffed into this channel with x other customers and an AT&T support guy. I suppose the idea is that a lot of people have the same questions, and that if you see yours asked and answered in there while you’re waiting, you can save some time.

This would work nicely — or at least not incredibly badly — if the AT&T guy had had any information, or if he had been able to do anything but trigger canned responses. It was one of those conversations like this:

customer1234: Are you a human, or a computer? I don’t think you read my message before sending that canned response, because it’s not relevant at all.

AT&T Steve: Thank you for using AT&T Wireless Chat Support. You will now be disconnected from this session. The chat window will remain open until you close it. For quick answers, make the new AT&T Mobility Help site your first stop. Visit http://help.sbcglobal.net where you’ll find pages of product information to assist you. Again, thank you for choosing Cingular Chat Support.

Ultimately, though, the guy sent a canned response to the effect that this was entirely beyond the capabilities of the chat support system, and that Nicole would have to call on the phone.

Since this was a Friday night, and since the least experienced people tend to work the Friday night and weekend shifts on customer support lines, she just forwarded her old phone to her new phone and decided to wait until Monday.

When she called on Monday, their call-handling system said that wait times were 21 minutes, so she decided to wait a few days and call back later.

With one thing and another, ‘a few days later’ wound up being Tuesday of this week. She was told that the problem was that there was still an AOL employee discount on the line, and that the number couldn’t be transferred with that in place.

Okay, so let’s remove that discount; Nicole doesn’t work at AOL any more anyway, and the discount was about $0.60 a month.

Well, they couldn’t do that, because there was something wrong with their computers. But — customer service win! — they’d call Nicole back Wednesday afternoon to take care of it. The important thing here is that they would call her back, rather than putting the burden on Nicole. As I said: customer service win.

Or it would have been, had AT&T actually called as promised. When she hadn’t heard from them by late Wednesday afternoon, Nicole called them. They were aware of the ticket and were able to remove the discount. At this point she was told, though, that it was impossible for her to transfer her number.

Not that it was difficult, or that it was complicated, or that it was impossible for that particular phone rep to transfer her number, but that it was impossible full stop. She was told to return the iPhone to Apple — paying a restocking fee in the process — and then call AT&T to ‘try’ — their word — to cancel the iPhone account by claiming ‘buyer’s remorse’. Then, Nicole was to buy a new iPhone and run through the activation procedure again, whereupon (she was told) her number would be able to be transferred.

It’s at this point that I took over the process. Nicole was asking them questions, trying to get some clarification that AT&T actually was telling her that she’d have to commit fraud with AT&T and forfeit $60 to Apple (which she couldn’t have, as the return period on the phone had already lapsed) in order to transfer her number; but she wasn’t having much luck. I only heard Nicole’s side of the story, but she was clearly being interrupted every time she opened her mouth.

I called not the regular AT&T customer service line, but the special iPhone customer service line. The guy there immediately said that this business about returning the phone was ridiculous, and that this was all screwed up, and that he wished we’d talked to him initially because what we were trying to do was really very simple. That the next four people I talked to all gave me the if-you’d-talked-to-me-instead-of-all-the-other-people-this-would-have-been-solved-quickly line, I somewhat doubt the actual truth of the statement.

Nevertheless, after about an hour on the phone, we’d arrived at this conclusion:

  1. The account needed to be switched from the ‘blue’ (legacy AT&T wireless) network to the ‘orange’ (Cingular) network before it could then be switched from ‘orange’ to the ‘new AT&T’ network. This network doesn’t seem to have a color, but I imagine it’s some kind of mauve.
  2. I would need to get a new SIM card for the iPhone, because the SIM card already in there had been assigned to the random number ((540) MAC-HOLY as it happens) that had been drawn from the hat when it had been activated.
  3. I should then call AT&T back at (877) 800-3701, which is the general activation support line; they would arrange to do the blue-to-orange switcheroo and to help me reactivate the iPhone and assign the now-orange old number to it.

At this point, it’s worth noting that I, the customer, was getting involved in the distinctions between the ‘blue’, ‘orange’, and ‘new AT&T’ networks, and that I needed to understand the difference between a “Core” AT&T store and a “Non-Core” AT&T store. All of this is utterly ridiculous, but as I am a reasonably smart guy I was able to pull this off, and even to understand what was wrong.

Anyway, so I went to the nearest “AT&T Core” store — not to be confused with Bellcore — and, as directed, asked for Matt. Matt handed over a new SIM card without delay.

By this time it was about 5:30 p.m., so I clocked out of my new part-time job as an AT&T iPhone customer support gopher, and did my normal Tino things.

Thursday morning, it was back to the grind. I called (877) 800-3701, negotiated a lengthy phone tree, and was eventually put on hold. The AT&T hold music is the World’s Greatest Baroque Hits, but it’s being fed by some kind of satellite service or something that cuts out every couple of seconds, replaced with white noise. This sounds like a small thing, but it’s not: it’s maddening. The whole point of hold music is to let you know that you haven’t been cut off; when the music itself cuts off at random intervals, it’s a constant distraction from whatever else you’re trying to do.

When a rep finally got around to me, I verified my identity and explained the whole thing to him again, and told that I was to call this number, give them all the phone numbers, the serial number of the iPhone, and the serial number of the new SIM, and that everything would be handled.

He argued with me. This was impossible, he said, and if-I-had-talked-to-him-first-I-would-never-have-been-told-that etc., etc., etc., etc.

This phone call ended with me hanging up on him while he was delivering another long speech about how this was all my fault, and how they just couldn’t do this, and how I just ‘didn’t understand how things worked’.

I immediately called the iPhone line, and gave them the spiel, including the fact that I’d been told to call (877) 800-3701 but that the people answering that line were worse than useless. Oh-that’s-terrible-if-you’d-called-me-first-etc.-etc.-etc. ensued. Now, the procedure changed. The first thing that had to happen, I was now told, was that the financial responsibility for the account had to be switched from Nicole to me, because I was the primary account holder on the new iPhone family plan. This, of course, required talking to another person, as anything involving billing or finance often does. The helpful iPhone CSR called the financial-responsibility person and explained things while I was listening to the static on hold, and then connected me to the finance group.

The finance girl immediately told me that I’d be charged a service fee of $18 for switching the financial responsibility from Nicole to me. I said that this was kind of silly because the whole point of this was to work around procedural roadblocks that AT&T had put in its own way.

This was a mistake, because it triggered the “we’re doing you a favor” mode in the financial-responsibility girl. “You’re being charged this because this is something you’re choosing to do, okay? You don’t have to do this,” she said. But of course I did have to do this, because AT&T wireless seems determined to get in its own way at every step. I said that I wasn’t in fact choosing to do this, but being told to do this by AT&T itself. While I was saying this, the girl interrupted me to deliver the same message. I think that she meant that I was ‘choosing’ to do business with AT&T at all, and that if I didn’t like that they were going to charge me more pointless fees over and above the activation fees, this was entirely my problem and that I could go to hell. I told her to stop telling me off for trying to do business with her company, and to just transfer the account. The rest of the conversation was conducted with her voice dripping with contempt.

With that done, the next step was apparently to install the new SIM card in the iPhone and to re-activate it using iTunes. I did.

Iphone-Sorry

This time, I didn’t bother even trying to call (877) 800-3701, because everyone at that number had been consistently rude, misinformed, and seemingly pleased by customer dissatisfaction. It wasn’t just indifference: they actually seemed to take glee in telling me (incorrectly) that I was Fucked, to put it bluntly. I called the iPhone people instead.

Oh-that’s-terrible-if-you’d-talked-to-me-bla-bla-bla. This particular phone call lasted for a little over an hour, with me on hold much of the time. I was told that it would be ‘impossible’ for me to re-activate the iPhone, because I was in St. Louis, and my account was in what AT&T calls ‘the Baltimore-Washington Market’. Apparently, I was told, the SIM cards were all locked — locked! to the market in which they were sold. I pointed out that I’d bought the iPhone in St. Louis and activated its pre-installed SIM card with a Baltimore-Washington account; but then this was only possible (they said) because the pre-installed iPhone SIM cards were special SIM cards that could be activated anywhere.

Were any of those special SIM cards available? No. Could they have FedEx knocking on my door at 8:30 the next morning with one of these special Baltimore-Washington SIM cards? After about 30 minutes on hold while they checked into that: No.

Did they understand that this was ridiculous? To their credit, they did. In a lot of customer-service dealings, you can recover a lot of goodwill simply by acknowledging that your customer is not insane for thinking that your company’s policies are a bit counterproductive.

Anyway, I was told to reinstall the old SIM, read all kinds of numbers off to them, etc., etc., etc. I’m not really clear about what was wrong at this point, and from what I was told AT&T wasn’t either. Eventually I was told that they didn’t know what was holding up this activation, but that if it somehow succeeded we’d have a problem again. On the other hand, if the activation went into some kind of limbo, we were in business because the humans could hijack the process at that point.

I was told to call back in an hour. I did. I explained all of this again. If-you’d-talked-to-me-in-the-first-place and so forth. Reinstall the new SIM, the market-locking thing having apparently been B.S. all along. This phone call took another hour, and the only result was that I was told that ‘experts’ were still actively looking into the matter, and that I should call back — to the (877) 800-3701 number — in two more hours.

If ‘experts’ were looking at it now, who had been looking at it before? I suspect that I know the answer to that, but that it wouldn’t be polite to say. I mentioned that every time I’d called the (877) 800-3701 number, I’d wound up hanging up in disgust; I was told to ask for ‘Roxanne’ — in the world of customer service, nobody has extension numbers, direct inbound dial, or last names — and that things should be handled expeditiously.

As it happens, I didn’t have to call back in two hours, because in about an hour and fifty minutes they called me back to tell me that the experts were still hard at work, and that things should be fixed imminently.

Ten minutes later, they called me again, and told me that things should be working. I was instructed to activate the iPhone in iTunes again, specifying Nicole’s phone number but my social security number. The phone immediately activated with the correct number.

So apparently all along the problem was that someone with access to at least one clue needed to look at the situation and take the proper action. Fine; this is how most things work. AT&T’s real failures here were two:

  1. Employing any of the people I talked to via the (877) 800-3701 in any capacity whatsoever. Not only were they not helpful, but at every turn they actively set the process back. They’re so bad, I wouldn’t be at all surprised to find that they’re all Verizon moles, sent to infiltrate AT&T and chase away customers.
  2. Not being able to identify the issue with my account and properly escalate it until after I’d been on the phone multiple times for multiple hours, repeating myself and growing more and more frustrated with AT&T. It appears that once the issue got into the right hands, everything was resolved pretty quickly. I’ll accept a delay while a problem is solved, but I will not accept having to project-manage the solution for a company to whom I’m paying money.

Speaking of which, I expect to have a followup to this when the bill comes. Right now, according to the AT&T website, I owe them either $240 or $68, depending on where I look. I fully expect the activation fees and first month’s bill on this to be fully comped; or I can pay them and then bill them for my project-management services in connection with the activation — which bill is, at my normal rates, a hell of a lot higher than their bill. At the moment, though, their system is far too disorganized for me to tell what the heck is going on.

Why I Don't Trust UPS

On Sunday night, I ordered some shoes from Zappos. I spent enough that I got free overnight shipping, which would ordinarily have meant that they would get here on Tuesday.

On Tuesday afternoon, we had a snowstorm, and UPS didn’t deliver it:

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– though even at 1:49 p.m., when they gave up on it, the roads weren’t very bad.

Today, they didn’t even attempt a delivery:

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I can’t say I entirely blame them. The road to the house is fine, but the driveway is so bad that I can’t even get up it with four wheel drive.

This isn’t a big problem, though, really, because the UPS depot is about four miles from here, and I drive past it when I go anywhere. I checked the UPS website and found that I could pick up Air packages until 7:00 p.m.:

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And I went down there.

You know the punchline, of course? Right. You can’t pick up Air packages until 7:00: they ‘pick up’ Air packages from there at 7 p.m. From a customer’s perspective, they really mean ‘drop off’, as in ‘you can drop off Air packages until 7 p.m.’

The hours are defined from their perspective, which I suppose I shouldn’t find all that surprising given the rest of the way they relate to their customers.

But the real punchline is that Nicole bought a pair of shoes from a private seller on eBay within minutes of me placing my Zappos order. That package arrived today, from Los Angeles, via Priority Mail. Little Guy: 1, Big Company With UPS Contract: 0

How Not To Sell Newspapers

The other day, I complained about finding some places near here selling the Washington Post for fifty cents, instead of thirty-five cents. I’m sure that if I checked — if I could have figured out who was responsible, and asked them — they would have said something about gasoline prices.

Gas around here is back down to $2 a gallon now. I haven’t bothered to check whether the price of the Post has also dropped, because the machine I usually buy my paper from never raised its price.

Maybe it should, though. I don’t try to buy a paper every day, but on the days when I do try to buy one, more than half the time lately I have been finding the machine entirely sold out before 9 a.m.:

If you can't get it, they don't get it

It’s been like this three days in a row now; the next time I’m passing, I will probably not bother to try to buy a paper. Burger King maintains house copies of both the Post and the appalling Northern Virginia Daily, and the demographics of Front Royal are such that I am usually the first person to pluck the Post from their rack. I save $0.35 (or $0.50), and the back seat of the Tinomobile doesn’t fill up with old newspapers.

But it’s not really the customer service failure that I’m interested in; it’s the corporate idiocy angle. If you do a search for Washington Post circulation on Google, you will not find words like ‘booming’ or ‘growing’ or even ‘holding steady’.

The media navel-gazers have a lot of explanations for this, but I have never seen them even mention the one thing that is within newspapers’ control. They can’t abolish the web, and they can’t get rid of TV, or reader apathy. But it is fully within their power to make it easier to buy the newspaper.

There’s precisely one place that I’m aware of on my end of Front Royal where I can buy the Post without having to wait in line or traipse all over a grocery store, or both. Is this machine outside a restaurant that serves breakfast? No. Is it outside a place that is open at all in the morning? No. Is it reliably stocked? No. In short, it’s placed and stocked for the convenience of the newspaper route guy, not would-be readers.

The newspapers are so focused on their external enemies, and their low opinion of their readers (a lot of big newspapers now produce a free daily tabloid full of celebrity ‘news’ and short, easy-to-read articles because they think that the public is too dull to understand the regular news), that they cannot see the most obvious and easily-correctable problems.

The Demise of AOL

There are a lot of stories this morning about AOL’s plan to offer most of its services for free. I have seen no mention in any of them of the connection to recent publicity about Vincent Ferrari. He recorded his phone call wherein he attempted to cancel his AOL subscription, which recording was subsequently distributed far and wide on the internets. It was distributed so far and wide that the guy wound up on a number of TV and radio shows, telling his story.

The result is that no one who pays the slightest bit of attention will ever sign up for AOL again. No amount of corporate apologies will help; AOL’s product was marginal to begin with, and now that the news is out about just how unbelievably bad AOL’s customer service is, very, very few people are going to trust them with their credit card numbers any more.

I have formerly been a defender of AOL, trying to point out that the doom-mongering articles that you could read in places like the Washington Post ignored, entirely, that this was a business that made billions of dollars a year while running on fumes, and that there was still a lot of potential there.

The Post — which is mainly owned by Berkshire Hathaway, a very large chunk of which is in turn owned by Bill Gates — was relentless in its attacks on AOL. They have even gone so far as to say that the 2000 AOL-Time Warner merger was a scam perpetrated by Steve Case to exchange AOL shares for shares in something ‘really’ valuable, like a company whose business is based on magazines with declining circulations, movies with declining ticket sales, TV with bad ratings, and music that’s being pirated by everyone and his dog.

The Post willfully ignored the fact that, in 2000, AOL was a company with a robust business operating an online walled garden and with considerable expertise in delivering custom-made client software to people (all those CDs), and Time Warner was a company with an enormous warehouse full of ‘content’ in almost every medium imaginable, but with no way to efficiently distribute it.

This should have been a match made in heaven. Assuming that, even in the best case, Time Warner would have held tight to its most valuable properties, an AOL subscription should have meant, by 2001, at least some level of access to most of Time Warner’s less readily salable properties. The company has thousands of bad or just obscure movies, TV shows, magazine articles, etc., etc. which to this day are not producing any revenue for them. Had they started digitizing this stuff, they could have started increasing the number of AOL subscribers paying them $25 a month, and without needing to threaten and harass people on the phone, either. They could instead have grabbed hold of the Long Tail and gone along for the ride.

This didn’t happen, though, obviously. A number of things ultimately scuttled that merger, in no particular order:

  1. The absence of Steve Case and Gerald Levin
  2. Time Warner turf wars
  3. Management-by-numbers
  4. Growing bureaucracy

In 2002, Steve Case largely disappeared after his brother was diagnosed with brain cancer. Gerald Levin, the former CEO of Time Warner, retired. The two architects of the merger were out of the picture, and the turf wars started. AOL was a small company without a whole lot of fat, relatively speaking. It never stood a chance against the more bureaucratically-minded Time Warner culture.

Everything became — and remains to this day — the subject of a turf war. One of AOL’s real problems is that it has no real consumer broadband strategy; a lot of the diminution of AOL’s subscriber ranks, we’re told, is because of people moving to broadband services.

Some of those people are moving to Road Runner cable modem service, which is owned by Time Warner and which is, in fact, headquartered in Herndon, VA, about a five-minutes away from AOL HQ. Was Road Runner folded into AOL? No. In fact, Road Runner subscribers had access to things like free video from CNN (back when CNN still charged for access to its video); AOL subscribers got no such deal.

AOL doesn’t offer VoIP service because Time Warner Cable does, and Time Warner didn’t want anything from AOL competing with it.

There are dozens of other examples, small and large. The company took advantage of almost none of the opportunities uniquely available to it, because each of those opportunities would have required changing something; and none of the Executive Vice Presidents who had been in charge of foozling around inefficiently thought much of that. The absence of Levin and Case meant that there was effectively no one around to order these children to Play Nice.

Then, inevitably, Management By Numbers set in, where people are put in charge of things about which they know nothing. The idea is that knowing about ‘management’, and not about what the company or division actually does, is what’s really important. Once in a while, this will not be a total disaster; but I cannot think of a single case where this has produced particularly good results.

What Management By Numbers does tend to produce is rampant bureaucracy. The Manager doesn’t really understand what’s going on, and so he thrashes around, trying to get a handle on things. Reports are generated. Committees are formed. Metrics are decided on and measured — usually badly. If the company doesn’t sink immediately under the weight of this and the resulting departure of key employees, Bad Decisions start being made, based on the bad metrics and imperfectly-understood reports.

The company continues to sink, so new Reports are written, new Committees formed, etc., etc.

Repeat until doom.

I always held out hope, though. AOL was in pretty bad shape, but it could have reversed itself. People forget about the walled-garden aspect of AOL, because most of their subscribers these days just use the service as a slightly expensive dial IP service. The walled garden is still there, though, and so is the giant pile of movies, TV shows, music, magazine archives, etc., etc., etc.: all that Time Warner had to do was combine the two and they’d have had a successful product.

They never could bring themselves to offer access to this stuff, though. You get access to the complete Time archive if you pay them $30 a year (and get a magazine mailed to your house every week); but if you pay them $25 a month, you don’t. For $12 a month — not all of which goes to Time Warner — you can subscribe to HBO and get all the latest episodes of The Sopranos, Deadwood, and Curb Your Enthusiasm; but for $25 a month you don’t even get access to any of Time Warner’s lesser cartoons from the 1930s.

Very, very recently, AOL has started to change some of this, offering certain heavily-DRMed TV shows to subscribers running certain software; and this gave me at least a bit of hope. They’ve still got the pieces of what could be a great service, of something that’s still not available anywhere online. If they’d only put them together, AOL would once again have something of value to offer people, and they could start gaining subscribers again.

All of this came crashing down in the last month, though, with the publicity that ensued when Vinny Ferrari posted the recording of that phone call. Now not only would Time Warner have to pull its head out of its ass long enough to remember that they need to offer something that people want, but they’d have to work to convince people that their service isn’t a roach motel. They appear to be responding to the latter problem essentially by offering the service for free; this is probably the best thing they could do in these circumstances.

But offering the service for free — essentially pulling down the wall around the walled garden — significantly diminishes their ability to do what they’re uniquely positioned to do, i.e. to make all those TV shows and movies available.

And so I think that’s effectively the end of AOL as anything worth watching. The Valuable AOL, as I like to call it, would have been a transitional product at best, but it’s a transition that could have taken ten or fifteen years. In that time, either the traditional Professional Media companies will have loosed their tight grip on their product, or they’ll largely be pushed aside all together. Time Warner has now, intentionally or not, opted for the iron grip on the rail of the sinking ship.

And the opportunity of this multi-billion-dollar company to shift its direction was destroyed, largely, by a single bad customer-service phone call. This call violated nearly every one of the Customer Service Rules, but it particularly broke #15, ‘Customer-profitability accounting is almost totally inaccurate’, and its meta-rule, ‘You don’t know who your customer is’. Vinny Ferrari was a nobody; but now, because he was treated badly, millions of people have an even lower opinion of AOL’s customer service.

So the customer service lessons to be drawn here?

  1. Offer something of value
  2. Do not coerce people into doing business with you

That those are the lessons really says something about how bad a pickle AOL is in.