Jul 05

Lowell C. McAdam
Chairman and Chief Executive Officer
Verizon Communications
140 West Street
New York, NY 10007

Dear Mr. McAdam,

I can’t understand your strategy behind pushing Voice Link as a replacement for landline wireless. It seems to be a major misstep, of the kind that should lead prudent investors to short Verizon.

I understand that your revenue from traditional landline services has declined. As you sell it today, copper landline service is mostly noncompetitive with the alternatives, and that has hurt its market share in your service area. But that’s not the whole story.

Yes, copper landlines come with many regulatory restrictions, require considerable maintenance, and do not support competitive broadband data speeds. From a consumer point of view, they only work in the home and they’re expensive.

But, from Verizon’s point of view, I think you’re missing something important: Copper landline technology has a substantial benefit that differentiates it from all of your competitors, a benefit Verizon has failed to market properly.

It’s reliable.

Or, at least, it used to be reliable; in your service areas, your failure to maintain copper plant and infrastructure has weakened that reputation considerably… but it can still be regained.

With a copper landline, properly implemented and maintained, service remains up until the line is severed, and that generally takes considerable damage. If commercial power is out, landlines generally remain up. If you need to call 911, it’s going to work best from a landline, which will have the capacity and power to complete the call, and will reliably connect you to the correct PSAP on the first try, with accurate location data even if you can’t speak. If you need a medical alert device, a landline is the most likely to work when you need it. It won’t turn out not to have a generator, or be overloaded by many calls, or fail due to radio interference. It doesn’t depend on having commercial power to the home to charge batteries or power base stations.

In short, the key differentiator of the venerable copper landline is that it’s suitable for life-critical communications.

Consider: Once you transition a customer to Voice Link, they are now on your wireless service. That’s a commodity product, and it lacks that key differentiator. For a consumer, Voice Link is not substantially different from AT&T’s fixed-wireless service available at Target, or similar offerings from Sprint, T-Mobile, or their MVNOs. It’s also not substantially different in terms of reliability or price from numerous VoIP providers.

By moving people to Voice Link, you’re inviting them to drop Verizon entirely and move to competitors that offer the same service with better features or a better price… because you can’t use your key advantage, the unmatched reliability of a regulated copper landline.

Investors should shy away from companies that willingly surrender a key market differentiator in the name of short-term profit.

Already, Verizon has surrendered the Internet market to its cable competitors by abandoning FiOS. Verizon’s DSL offerings are pathetic compared to cable’s low-cost, high-speed Internet; fixed wireless LTE is so expensive that it’s solely a last-choice alternative.

I am currently a Verizon landline customer. I pay for the service because I value the reliability, even though Verizon’s landline service costs more than a VoIP line even without services now seen as basic, free features on every competing technology: caller ID, call waiting, voicemail, unlimited long distance… If Verizon were to stop providing this landline service, I would not purchase Voice Link. I would move to one of your competitors, where I would get a better value for less money.

My advice to you: Abandon Voice Link as a replacement for copper landlines. Market it as a low-cost alternative for those who need seasonal service, or service where installation of the last mile would be prohibitively expensive to the customer… or as an additional-line alternative to VoIP. Reinvest in your copper landlines to restore their reliability. Market that reliability heavily. Bring the feature set of a basic $35 landline in line with that of a $20/month prepaid cellphone: caller ID, call waiting, and basic voicemail at no additional charge. You can then use affinity programs to sell landline consumers on your wireless offerings by providing a discount.

The alternative—eliminating your inherent competitive advantage, the last advantage of the old Bell monopoly you’ve been allowed to retain—makes no business or social sense.

Sincerely,

 

Robert A. Levandowski

Jul 26

Parallels makes a popular program, Parallels Desktop, that lets Mac users run other operating systems in “virtual machines” on their Mac. One can run various flavors of Windows, as well as UNIX and UNIX-like operating systems such as FreeBSD, Linux, and Solaris. It’s a useful program.

It’s also a program from a company that seems highly clueless.

Okay, I’m not happy that every time a new major version of Parallels comes out, it costs at least $40 to upgrade it… and a new version seems to be required for every new version of Windows and every new major version of OS X. But okay, these things cost money to make, and virtualization software is more complex than most. It’s still annoying when an OS upgrade breaks Parallels until you pony up for a new version.

But now they’ve gone too far. Parallels Desktop 7, which is required to run under OS X 10.8 Mountain Lion, comes with advertisements. When you start the program, you get an ad for other Parallels products, or products from third parties that Parallels has deals with. Many of these products are Windows “bloatware”—software that takes up space, slows things down, and doesn’t provide much (if any) value to the user. You get these ads even though you’ve paid full retail for the software.

And you can’t turn them off.

Oh, there’s a “Don’t show me this again” button. But the thing is, Parallels has taken a unique interpretation of this phrase. Most people, seeing a dialog box when they start a program with some useless blather in it and a “Don’t show me this again” option, would assume that checking the box would prevent you from ever seeing that dialog on program startup again. Parallels’ interpretation, however, is “Don’t show me this particular advertisement again.”

So you check the box, expecting to be rid of it… and a few days or weeks later, it comes back, with a new dubious offer.

Ad infinitum.

If you ask Parallels on their public forums, they’ll tell you that you cannot disable the advertising entirely… and that they can’t remove it because it could affect Parallels’ performance.

Well, the second part is unmitigated bull excrement, certainly. They wrote the ads in; they can write the ads out. The only “performance” that will be hurt by removing the ads is the performance of Parallels’ balance sheet.

Besides, you can disable ads in Parallels Desktop, although you have to use commands in the UNIX command shell to do so. But don’t try to share this information with other Parallels users on their forum; your message will be swiftly deleted by Parallels staff, who continue to publicly state that it’s impossible. (However, if you complain loud enough, they may tell you the trick in private, out of public view.)

That’s just plain sleazy. It’s demeaning to the intelligence of their customers on many levels, and it’s a clear sign that the company has no respect for its customers.

It also raises the question: Parallels, of necessity, insinuates itself deep into the guts of your operating system. If they’re sleazy enough to do this, what else are they sleazy enough to do?

But that’s not the end of the clueless. Have a look at Parallels’ Facebook page. On the plus side, someone from the company is actually watching the page and responding to many posts there. However, the vast majority of those responses is some variation on ”Thanks, please visit our website to open a support ticket for your [question|concern|criticism|widespread obvious PR disaster on our part].”

Guys, the key word in “social media” is social. Sending people to your support website to get a response to a question asked in public is anti-social.

The thing is, as much as you wish you could control the narrative on Facebook and avoid public conversations that air your dirty laundry… well… it’s just not possible. Better to avoid having dirty laundry, or at least be seen attacking it promptly and energetically with laundry soap in public.

What Parallels is doing is a naked attempt to control the narrative, one that’s obviously failing… and doing so in a public, insulting-your-customers sort of way. Someone needs to tell them about the Streisand Effect.

Feb 10

Here’s some unsolicited advice for Ron Johnson, the new CEO of J. C. Penney.  Mr. Johnson has announced sweeping changes in the way Penney’s will do business, building on his previous successes at Target and Apple. I think his basic plan is not just sound, but laudable. If he really wants to reinvent department-store retail, here’s three specific things he could do:

Have a public e-mail address.

His former boss and mentor, Steve Jobs, had the public e-mail address steve@apple.com, and the address was well-known to the world. Apple even publicized it on their website. What’s more, Jobs personally monitored the e-mail sent there, and was known to occasionally reply to customer messages. Johnson should do the same: let us mail ron@jcp.com with our feedback. Yes, there will be a lot of noise to go through. On the other hand, CEOs often find themselves isolated from reality behind layers of middle management; having a direct channel to one’s customers helps prevent this. It worked for Steve… and no one else in this retail space is doing it.

Find out when customers are leaving the store because you don’t have their size.

When I shop at department stores, I’m often disappointed to find that they don’t have the size I need in some garment. Most stores don’t do a great job of arranging product to make it easy to find the right size. Even when they do, it seems like they stock sizes based on some inscrutable nationwide formula, not local demand; otherwise, it wouldn’t seem like the local stores are always out of the same sizes!

Look, department-store customers are used to lassez-faire customer service at department stores: We’ve got what we’ve got on the floor, we don’t know what’s coming in next week, we don’t know nothing. If the right size isn’t there, customers just leave. It’s a missed sale… and there’s nothing to tell the retailer “you would have made a sale if you had stocked more of size X.”

Penney’s will make more sales if they have the right sizes. They’ll get more customer traffic if they feel confident the store will have their sizes. You’ll gain customer trust and loyalty if they know you will have their sizes.

The store should figure out some easy way for customers to tell you “I would have bought this item if you had it in this size,” and promote the hell out of it.

Leverage logistics for the customer.

Look, we all know that retailers live and die by logistics and inventory. Penney’s has to know how many items they have in the store, of each type and size. In this day and age, it’s all computerized, and it should be easy to tell how many size-L red men’s cable-knit sweaters you have in the store… and in other stores. If they don’t already have this capability, I’d be astonished.

So, if I come up to a salesperson wishing that the store had that sweater in stock, I should never hear “I’m sorry, we don’t have any” as the sole response. Leverage your logistics; the salesperson should be able to whip out their iPod Touch with its barcode scanner, scan the shelf label, and tell me: “Oh, I’m sorry we’re out of that. I’ve noted that you were looking for it, so we can have more items like that in your size in the future. I see we’re expecting another shipment of this item on Thursday. I can hold one for you, if you’d like. I see our store in Poughkeepsie has two in stock today; I could also call down there and ask them to hold one for you.” (Bonus points: “Or I can have them put one on the truck tonight; it’ll be here tomorrow after noon.”)

This would delight customers, and it shouldn’t cost much—especially if Johnson has any plans to roll out portable-device checkout like he did at the Apple Store. Few stores go this far for the customer nowadays… but I know it used to be standard practice for Penney’s competitors, and that was back when it meant calling the other stores and waiting for someone to check the floor display.

Aug 01

For the last week or so, a work crew has been tearing up the road outside my house. It turns out that this was Central Hudson Gas and Electric, installing a new natural gas line. This project showed me that CHG&E’s management has no clue when it comes to treating customers right.

Rudely awakened, dropped by voicemail, made to wait at CHG&E’s contractor’s whim for most of a day, a garden trampled and dug up, a ruined lawn, all because of what seems to be an institutional lack of common courtesy and decency aforethought.

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Dec 21

As I sit here, I’m listening to Christmas music piped from my Mac to my home stereo over my home’s Ethernet network, under the wireless remote control of my iPad. To most people, this sounds like an incredibly geeky accomplishment—perhaps even science fiction brought to life.

The thing is, despite this feat of digital integration, I know there’s so much more that my house should be able to do, but can’t… and most of it is due to legal or policy restrictions that do little except inhibit innovation and preserve outmoded business models.

For instance, both my TiVo and my Blu-ray player have network connections. Neither, however, can play videos that I purchased from iTunes. Everything with a video output seems to support Netflix nowadays; where’s the AirPlay support? For that matter, why can’t the entire industry agree on a standard for sending high-def video locally over TCP/IP, and implement it everywhere?

My TiVo used to be able to record shows that it thought I’d like to watch. Since Time Warner implemented switched digital video, forcing me to accept a buggy “tuning adapter,” that function works rarely if ever, and almost never manages to find the high-def channels. Of course, it’s a bit of a crapshoot if some of those high-def channels will tune, or if the tuning adapter will punt on them. The sad thing is that the tuning adapter is little more than a customized cable modem, and I already have one of those in the house. There’s no technological reason why the TiVo can’t send its tuning requests to Time Warner via TCP/IP. My opinion is that Time Warner will take any action it can get away with that makes TiVo ownership painful, in hopes of renting its own substandard DVRs to customers instead.

TVs now come with Ethernet support to retrieve movies from Netflix and YouTube. Imagine if you could also use this capability to send video signals within the house: Networked televisions could all draw on the same feed from your TiVo to let you watch a show as you wander from living room to kitchen to laundry room without them being out of sync, and without huge investments in video distribution infrastructure.

Gigabit Ethernet switches are cheap. HDMI splitters are not.

I bought the VGA cable for my iPad. I could use it to put presentations on my TV, or YouTube videos, but not movies I bought from iTunes; apparently I’m not allowed to watch anything at resolutions above 480p in analog form any more, as I might bootleg videos that way. (Of course, if I’m technically competent enough to use an iPad and a VGA adapter with my television, I could probably find a way to copy that video in digital form if I were truly so inclined.)

There’s a vast market for “universal remote controls.” The technology in all my entertainment-center remotes is identical; why do I need to spend even more money on integration? Why can’t vendors sit down and create a universal standard for commands, the way that USB has a universal standard for keyboards and Bluetooth has a universal standard for headsets? For that matter, HDMI was supposed to enable this, by letting components talk to each other and share command information: insert a disc in a HDMI-equipped Blu-ray player, and it could tell your audio receiver and your TV to make appropriate settings changes, and the TV could pass back remote-control commands it receives from its remote. In practice, this technology only works if all your components come from one vendor, and even then it’s often half-baked.

There’s so much that could be done with our existing technology, if only we could keep scared businessmen from prohibiting it.

I’m not a rabid open-source advocate of the Stallman camp, the type who believes that all software must be free of charge and free of restrictions. Open-source software has its uses, and there are places where proprietary software is necessary to ensure growth of the ecosystem. Whether the software is free or not, though, the protocols need to be free and unencumbered. Proprietary devices are more useful, and thus more likely to be profitable, if purchasers can use them in novel and unanticipated ways. In the modern world, what your widget does isn’t as important as how it plays with others.

I only wish that consumer-electronics manufacturers would realize this.

Jul 21

In the past I’ve written about my esteem for Cook’s Illustrated. They make it easy to be a great cook.

Tonight, however, Cook’s has lowered their reputation with me considerably, by trying to scam me out of my money.

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May 30

What can you do when you just can’t get satisfaction from a software company despite your best efforts? What if the company’s tech-support script monkeys have left your computer nonfunctional, worse than it was when you started, and they refuse to provide any more assistance?

Sue them in small claims court.

May 17

While visiting New Jersey this weekend, I stopped at the Williams-Sonoma store in the Short Hills Mall.  Williams-Sonoma is an upscale kitchen-accessories store.  The Short Hills Mall is an “ultra-premium” mall, the sort of place where the anchor stores are Nordstrom, Neiman Marcus, and Bloomingdale’s instead of JCPenney and Target. What should’ve been a premium shopping experience turned into a frustrating trip that makes me unlikely to visit that store again.

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Feb 14

While egosurfing the other day, I came across an interesting entry at Chris Keane’s blog that links to my Art of Turboing article.

In “8 tips for improved turboing: customer service workarounds,” Chris details a few tips that can help you take turboing to the next level. Continue reading »

Jan 12

In 2003, I wrote the following blog entry:

I’ve recently inherited a house. The air conditioner, a jumbo window model from Carrier, is operable, but the mode selector knob is broken. Although it can still be used with judicious use of a pair of pliers, I wanted to get a replacement knob.

It turns out that Carrier understands a key tenet in customer service: Don’t sweat the small stuff. Even though this air conditioner was made over a decade ago, it won’t be a problem for me to get the knob. In fact, Carrier will send one to me at no charge. They make replacement knobs for all their room air conditioners available for free, just for the asking. Their web site offers instructions for requesting new knobs online.

This is how you make customers happy. A small, inexpensive part that would be hard for service centers to stock, creating a logistics nightmare… is instead centralized and turned into something that makes customers feel “taken care of.” This kind of small gesture is what leads to repeat customers.

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