Customer Service vs. Marketing?

November 4, 2011

Much of the content I provide for The Official Merchant Services Blog I write like a news story. The goal there is to provide quality, insightful information on topics that relate to what we feel our visitors and merchants can use in their business. But this is still a blog. And today I’m going to take a more casual, more blog-like approach. In the end though it’s all going to come back to a very relevant point about customer service, e-commerce, and the holiday shopping season.

Good Call Gone Bad

I have ended my relationship with the Apple iPhone. Which is a pretty significant departure for me. I’ve had an iPhone since 2007. While I wasn’t the first in line to get one, I was still a very early convert and had one a couple of months after its launch. I “wow-ed” my friends with its touch screen technology, and became a loyal iPhone customer all the way up until this week.

Poor customer service is what caused me to switch to a different smartphone plan and leave the iPhone. Here’s what happened:

I hadn’t upgraded my iPhone in awhile. I was still using the 3G. My battery was getting spotty. My internet connection through it was definitely showing its age. It was time for me to upgrade. And conveniently enough the iPhone 4S had just been released. I thought this was an amazing opportunity to upgrade right before Christmas. And luckily (or so I thought) for Apple, I had two phones to upgrade. I had purchased an iPhone as a Christmas present for my mom a couple of years back. And it was on my phone plan, and she was really unhappy with her internet speed on the phone. Win-Win for the Apple store right? Two phones to upgrade.

One Step Forward, One Step Out the Door

So I went into my local Apple store Monday evening looking to upgrade. At $200 per upgrade, I was basically walking through the front door with at the very least $400 to spend on their products.

That’s when things got all bizarro-world. Up was down, North was South, and making sales was not the salesperson’s goal this day. I was told that I could not upgrade my phone that day. That I had to do one of two things:

  1. Log onto their web-site and purchase the phone online directly from the apple store’s site. I was told this would take 1 to 2 weeks to deliver.
  2. Log onto their web-site and make a reservation to pick up a phone the next day. I was informed that I had a very specific window in which I could make this reservation (between 9 p.m. and 11 p.m. at night). I was told that I would run into high internet traffic and would likely have to refresh the page multiple times. I may not make it into the reservation quickly enough because of this (The salesperson compared it to bidding on something on eBay but in my head it sounded more like trying to obtain playoff tickets before they sell out). And I was told I had a very specific window of opportunity to make it into the store the next day to pay for my reserved iPhone.

And after explaining all that, I was ushered out of the store. Just like that, $400 walked out of their store.

Cool Like That

I have to ask: What is wrong with that business model? I mean, I fully understand there’s some marketing tactics being employed right now by Apple. Part of what makes Apple the brand that it is stems from their marketing of “cool.” That their style drives the demand in their product and that they can give that aura of being too cool to worry about beating their competitors with boring numbers. But how far does that extend? Is it a good move to let $400 walk right out of the door? What kind of customer service is that?

To get back to my misadventure, after walking out of the store with no service, I did indeed go home and jump onto the web that night. But instead of visiting Apple’s web site, I went to AT&T’s site –– my phone service and data plan provider. I just wasn’t even going to try and deal with Apple’s site. Especially with all of the obstacles they put in front of me. I did note that AT&T’s site would give me an upgrade to an iPhone 4S and promised 2-day  priority shipping. But I didn’t really investigate the details of what they were going to offer. I was that annoyed with the Apple Store’s treatment of me. I had been a loyal customer of this product for 4 years. I’d upgrade multiple times in the past. And never once experienced anything like this. Apple did not want my money. So as fascinated as I was by AT&T’s offer, it was time to move on.

Ex-Phone to the Next Phone

I upgraded my service plan and smartphone to a Samsung Galaxy S II. For the exact same price as the iPhone 4S.

My phone arrived last night. And now for the first time since 2007 I’m not using an iPhone. It all comes down to the customer service.

I’ve read stories explaining that demand for the iPhone 4S is higher than supplies. So that’s why this reservation process exists. However I question the circumstances that led up to this situation existing. The iPhone 4S was released in time for the holiday shopping season of 2011. The iPhone is an industry leader. And this is one of Apple’s biggest releases of the year. What prompted them to under produce?

I tend to think it’s part of their “oh so cool” marketing strategy. By under producing they help continue to stoke the flames of demand. It’s this slick new gadget from the hip tech company. And you want it even more because you can’t have it.

The Bottom Line

There is a lot of power in that strategy. But as I said to a friend of mine the other day at lunch, Microsoft will stay ahead of Apple on a lot of things simply because Microsoft would rather have my $400, and your $400 and everyone else’s $400. They’d rather make the sale. Customer service wins out over cool branding and hip marketing. And that’s something very important for merchants to remember heading into the most frenzied portion of the holiday shopping season. The iPhone 4S is trying to be the Tickle-Me-Elmo of the smartphone industry. The must-have/can’t-find item. And I am guessing that in the long-run losing out on my $400 isn’t going to hit them very hard. But that’s not a mistake smaller businesses can make.

It’s All About Service

Customer service is key. With e-commerce being so prevalent, consumers are blitzed by options. They can shop around by clicking from here to there. And your business needs to make an impression on customers. Especially those that walk into your brick and mortar operation with money in hand looking to purchase. If the Apple store had done anything to retain my business, they’d have kept me around for a few more years. Instead they showed me the door. Literally.

Merchant Services Blog Customer Service Samsung Galaxy
The Samsung Galaxy S2

I didn’t just decide to blast Apple without checking around to see what the deal was with this. And I do have a certain level of understanding about how the company has to now deal with their short supply and still move forward with trying to sell the product. I have a friend who went through the reservation process and was as flustered with it as I was just being told about it by the salesperson in the store. I also poked around to find some relevant stories and information on this.

Here’s a Conversation Marketing Blog about trouble with Apple Store customer service. The issue is completely different. But I did get a chuckle out of this image. And it underscores my overall theme here –– Customer Service needs to improve.

That blog led me to this article about Gary Vaynerchuk’s book The Thank You Economy. The book makes “a compelling case for why businesses need to adapt to the new reality that one-way push communications are no longer as effective as building a real, sustainable relationship with your customers.”

Which gets round to the whole reason this story exists on The Official Merchant Services Blog: Quality customer service is at the very heart of the Host Merchant Services business philosophy. As our CEO often says, “You stay with us because you’re happy.” It’s just that simple. No contracts, no termination fees, no tricks. Host Merchant Services will not run you off the way the Apple Store feels it can with customers who are looking to spend hundreds of dollars. It’s not part of the HMS philosophy.

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